There is a movie I watched when I was a kid (during the 80s) the
carachters were stuffed animals and toys it was not a cartoon- but the
toys were animated sort of like gumby- it was also a christmas movie--
the toys came a live when the people were not arround. One of the
characters was a cat toy that looked like a mouse and his name was cat
nip.

Hello.

I believe that you're thinking of Jim Henson's "The Christmas Toy" (1986).

Here's one viewer's description:
"I was watching a Jim Henson film last weekend called The Christmas
Toy. It was basically like Toy Story where all the toys come to life
when the kids aren't around."
http://4dw.net/dmarkedlove/challenge.html

See:
Internet Movie Database - The Christmas Toy (1986)
http://www.imdb.com/title/tt0099263/plotsummary

The movie features a cat toy mouse who smells like catnip.

"Even though Mew loves Rugby and wants to be his friend, Rugby
discards his friendship calling him a "cat toy" and insulting him
because he smells like catnip."
Epinions review:
http://www.epinions.com/mvie-review-1133-356ED312-3A0F094A-prod6

Also see some screen photos at:
http://www.toughpigs.com/myweekxmasanother02.htm

VHS available from half.com
http://half.ebay.com/cat/buy/prod.cgi?cpid=2040813
-------
search strategy:
christmas  "toys come to life"  "like toy story"
"the christmas toy" catnip

I hope this is the movie that you had in mind. If not, please let me
know via the "request clarification" feature. Thanks.

Thank you! That is exactly the movie I was looking for.

Thanks for the tip.
-juggler