This episode is a parody of "It's a Wonderful Life" where the main character is shown what the world would be like if he wasn't born. The ending is similar too.
The ending, with Carly saying that the tree needs a little love, saying that Spencer's not normal but he made a nice tree, and the cast gathering around "oo oo oooing" to "Hark the Herald Angels Sing," is a take off of the ending to A Charlie Brown Christmas.