Note: This is an updated version of an older article that I wrote, posted a year ago in anticipation of last year's Steam Holiday Sale. Looking for that article should redirect you to this one.
TL;DR Version: The Steam Holiday Sale 2014 starts at 10:00 AM PST/1:00 PM EST December 18, 2014 Convert the time to your local time, and you'll get the general idea of when it starts.
(I put the TL;DR at the top so you could just skip past the post)
It's Christmas (or whichever holiday/or lack thereof you choose to celebrate/not celebrate). That means carols, peppermint-flavored things, trees, house decorations, presents, kind people, and most importantly, the Steam Holiday Sale.
When does it happen?
Today. It starts today, December 18th, 2014, at 10:00 AM PST/1:00 PM EST (convert time to your local time zone). Finish reading this, then go out and spend those hard-earned monies on those super-cheap games!
Why should I care?
Steam Sales typically involve big name titles available for absurdly low prices. Dragon Age: Origins Ultimate Edition for $7.50 USD? Skyrim for $10 or lower? It'll happen during a Steam Sale. Also, there's sometimes a giveaway (but not always, so don't count on one this time around) that involves doing a few things with the games on sale to get a ton of free games.
What should I prepare for?
1) An absurdly busy Steam storefront at the start. For the first hour or so, you may not be able to view the storefront to grab these awesome deals. This doesn't mean you should avoid trying to buy things right off the bat. It just means you'll need to be patient as the servers try to deal with the absurd amount of people trying to buy things on Steam.
2) Lots of sales. There's always a bunch of daily sales, which last for 24 hours, most of which will go up for an "encore" sale the next day, for another 12-24 hours in case you missed it the first day. There's also flash sales, which typically involve "older" (read: anything released before early 2014) or indie titles on sale for cheaper than the daily sales. These, however only last 8 hours each, so get right on them! Also included in the flash sales is a "voter's choice" sale, where everyone has a chance to vote on a game in the next upcoming flash sale. Whichever game gets the most votes gets the sale. The other games sit out the sale. Flash sales typically see more instances of "repeat" sales, so if you missed out on a great deal, don't be disheartened, you'll likely get another chance later.
3) Pricing errors. Sometimes as a game is put up on sale, Steam will make a mistake. For instance, a AAA game on sale for $1.00 USD. It doesn't happen often, and only for a few minutes, but they do happen. If you buy it at that price, you won't get charged the extra money that it would have gone on sale for if you managed to get the game for the super low "erroneous" price. These typically won't show up on the store's front page, so you'll typically have to manually hunt for these super-low prices yourself when the sales change out. If you manage to grab one, pat yourself on the back! They're hard to find, and even harder to take advantage of.
If you can't access the storefront from the website or the Steam program itself, try using the iOS/Android app. 9/10 times it'll let you through to peruse the great deals! Also, this is the perfect time to finish up shopping for that gaming friend of yours, or even to treat yourself to a few games yourself. Just remember that there's going to be a ton of stuff on sale, so pace yourself, and try not to go broke this Christmas season.
Added from the comments (to help out us, the consumers):
Tommy MF Pickles says...
DO NOT FALL FOR THE INITIAL CUT! If the game is on sale but not a daily/flash/community deal? DON'T BUY IT FOOL! They are smert at this; they don't want you to get the best deal. See a newer game on sale ? Wait for the Daily Deal .. it'll be that much more off. Learn from my pain!
Straw Hat says...
Just a heads up: Even when a game you want goes on a daily or flash sale, make sure to check some of the other digital markets as well, namely Amazon, Green Man Gaming, Gog.com, and Gamefly. Sometimes you'll find the sale matched or beaten with someone else, and usually these storefronts are just selling Steam keys.