You could consider a family project, either a scrapbook (or virtual scrapbook) or a video of compiled photos and video that family members can contribute. This might be a good thing for the grown sons, or perhaps some of the older grandchildren, depending on their ages. Adding in some of Grandpa's favorite music in the background, or songs that remind people of him, can be nice. It's a great way for family members to focus on what's really important about Christmas, which is not the gifts but the spirit. If the family is religious, that can work, but if they are not, it still works. I find that most kids 12 and up are pretty adept at computers, graphics, and so on - everyone could have the "assignment" of scanning what they have and then either sending it to the more computer-savvy grandchildren (or sons) or bringing it all together when they arrive to put the finishing touches on it. It could include some interviews with family members about what they remember about Grandpa/Dad and what his legacy is. It could be sad, sensitive or amusing - or a mix of all three. There's no "right" way to mourn. What a nice thing for your mother-in-law, but everyone could have a copy of it.
There's also a company called "Reflections" that creates memory lamps. There are a bunch of them around, but I happen to have visited one near me and I know the owner ships the lamp of your choice plus a small framed poem about the deceased person. These are often used at funeral homes in lieu of flowers, but it could also be used in your home - perhaps put it on a side table with the poem and a few framed photos? Here's the link to this store but you could try to find one closer to you if you think that's important. http://www.reflectionsofmarlborough.com
It's nice to do some fun things and have some laughs too, so don't make it all somber.
The candle idea is nice but don't let it burn unattended, especially all night, unless it's in a tall glass hurricane lamp. and with table protection underneath.
I hope things go well for your family - holidays can be tough especially when grief is new.