The premise is absurd enough to be a hilarious story, but if it's meant to be humourous, it's written dry enough that you have to interpret the humour for yourself. Actually, the tone of the book is more akin to that of an action movie than a black comedy, with plenty of drama and explosions.
The pacing was a little frantic, and things felt like they were happening all over the place. There are a lot of auxiliary characters, and they all have their own viewpoint, so while there's a lot going on, most of it feels like filler. The transitions aren't always clear, either, and sometimes I would be several paragraphs into a section with a new narrator before I realized we'd switched over.
The Claus Effect started as a clever and tightly-written short story, "The Toy Mill", which won an Aurora Award in 1993. The award was well deserved. I think the biggest issue here is that what worked really well as a short story just became too much for a full book. An evil, vindictive Santa was clever and original in short form, but over the 250 some-odd pages of the novel, it just became weighty and depressing. The characters weren't given any extra depth; instead, there were a bunch of extra ones tacked on, substituting quality for quantity. There were several big action sequences, most of which erupted rather abruptly and ended up going nowhere.
Overall verdict is to read "The Toy Mill" if you can get your paws on it, but skip over the long version. Once I got past the backstory (which basically consisted of the short story), I just felt like I was trudging and not getting anywhere doing it.