What does it mean when this game says it detects Christmas? The DOS prompt asks if I want to activate Christmas. Do I? What the fuck does that mean?

It's an Easter Egg mode that adds some Christmas-themed features to the game (like changing the computer's voice) if you play during December.

It was included in the latest update of the game, which you have. Its pretty fun shooting up enemies with candy canes XD

Of course. Everyone loves Christmas.

it replaces bombs icon with a present icon, it replaces the regular red beam shots with candy canes, it colors the Gatling gun blue like snow, and more.

humorous, but personally I prefer to leave it off. its really up you whether to use it or not.

if will not harm anything if you test it out by saying yes, you will still be prompted to say yes or not every time you run the game. So every checking it out by saying yes you can just save, restart and choose no if you don't like it

Yup, that mode was just for fun. Was lots of fun to redo some of Danc's art. ;)

Don't remember anymore who's voice that was. Been such a long time!

Lots of mysteries tucked into the game, but by now everyone's found them all. Still, surprises for anyone new to the game. :)