What happens is that you submit a letter in the comments of the submission post. The mod then reposts all of the letters to the comm as separate posts and sets them to be 'screened comments'.

People then leave things in comments, whether that's fic or icons or art or even just 'seasonal greetings'. Sometime after Christmas - I think it's normally just after New Year (I've only done it once and can't remember), the mod unscreens all the comments and people can go and find their post and see the stuff that people have left for them. The fact that the mod reposts the letters and screens comments means you don't get to see stuff until then :)