The effect in this photograph is called BOKEH. It can easily be achieved by using a very low f stop. I used my 50mm lens with an f stop of 1.8 and a speed of 1/20th second. The red bauble was about 5 feet away from the back lights. 1.8 gives a very shallow depth of field.

This is the tree in the Living Room, the 12 footer, otherwise known as 'The Big Kahuna' according to Emmy. Used a tripod, Shutter Speed 1.6 seconds, f stop 3.5.