What is the latest update on this idea, has a decision been made yet
In terms of Christmas 2015, it is now far too late to do anything - full schedules for the Christmas period by now have got as far as being issued to bus garages, drivers allocated to duties and so on and (while I don't want to say what stage of the process I'm involved in) Christmas Day has not been.
TfL would have needed to start talking to bus operators several months ago - and they in turn needed to start talking to their staff representatives (although the experience over the night tube thing suggests that TfL don't think this stage is needed)
Yes, it could be done in future years but -
while there would probably be staff willing to volunteer to work 25 Dec, it would be more than just drivers - there would need to be TfL central control, control staff at the bus garages and the bus operators' radio rooms (the larger operators will have one radio room covering 2 or 3 garages), engineering cover to deal with breakdowns etc, and staff to clean and fuel vehicles either at the end of the day or an additional early morning shift to do this on the 26th.
When London Transport ran its own buses, not all garages opened on 25 Dec - many routes that had allocations from two or more garages (quite common then but a rarity now) only had one garage running - this saved on garage staff. (I don't know if staff at one garage that was closed had the opportunity to volunteer for a duty at the nearest garage that was running)
And even if it was 'volunteers only' then I expect the staff would expect enhanced pay for the day rather than set a precedent of it becoming 'just another working day'
Then there would be staff time both at TfL and the bus operators in agreeing service levels, preparing schedules, agreeing the price for something that was never in the original contracts, allocating drivers to duties, and feeding information in to the publicity machine / real time info system and so on - and finding a way of getting detailed info out to people who don't have internet access.
Financially, what would TfL get out of it? Travelcard holders would expect travel to be included in what they have already paid for, so only PAYG customers would actually pay anything. Getting the Oyster system to charge a premium fare on one day might be technically possible, but not sure if the cost of this would outweigh the income. And it would not be feasible to set up the ability to handle cash for one day only. Of course sponsorship could be sought in the same way as New Years night.
Some bus operators might however welcome a solution to the capacity problem that exists at Christmas - there are some garages that no longer have room for their whole allocation on the two nights when the night buses don't run!