The story begins, as all good Batman Christmas stories do, on Christmas Eve as Batman notices that the Christmas star in a nativity display has been stolen, a detail that will, of course, become important later on.
However, Batman's got bigger fish to fry at the moment, like busting up an underworld holiday party to learn why mobster Matty Lasko has arranged for a boat to be waiting in Gotham Harbor that evening. Lasko reveals that he did it as a favor for his former cell mate Boomer Katz. Batman learns that Katz has taken a job as a department store Santa and disappointedly deduces that the supposedly rehabilitated ex-con plans to rob the establishment.
It turns out that Boomer is a reluctant participant in the robbery scheme, and turns on the gang of robbers just before Batman arrives. Batman rounds up most of the robbers, but one escapes, taking Boomer as a hostage. The light of a star shining through the hole in the aforementioned nativity display where its Christmas star had been, leads Batman to the hood and his prisoner. Its a Christmas miracle that gives Boomer Katz another chance to straighten his life out.
"Wanted: Santa Claus--Dead or Alive!" is actually pretty typical of Batman Christmas stories of the period and O'Neil's work with the character in general. Its true significance lies in the fact that it was drawn by Frank Miller, in what was, in fact, his very first work on the Batman. Miller's Batman stories range from the sublime ("Batman: Year One", The Dark Knight Returns) to the silly (Spawn/Batman, All-Star Batman and Robin) and it all started here.