Well, it went pretty well, all things considered.

It went great, and she said yes, to be exact.
The day I bought the ring, I actually asked both of her parents for permission (they're divorced, so I wanted them both to be included), and then told her friends and my friends and family that I was doing it, as well as her family- I told a few people, and asked them to let everyone else know, and then ask everyone to keep it quiet.
The few weeks before Christmas, I had been giving her hints about what her present could be. It's one of the things she always harasses me about, even though my hints usually are vague and driver her crazy.
Here was her (partial) list of hints:
"It could be cold."
"It could be warm."
"It could be white."
"It has to do with water."
"It's like Man's Chinese Theatre, but without the stars."
Then I let her ask me a question, and she wanted to know who knew about her present. So I told her one of my friends who knew. So she asked for another- so I told her another of my friends. We did that three or four times. It was awesome.
"It's near salt water."
"Some people in your family know."
"It involves a captain."
"We have to drive somewhere."
"You have to dress up."
"One of my hints is totally a lie!"
The last hint was the best hint of all, because she had gotten pretty close to guessing, and I had thrown her off the scent with the "captain" hint, and then she had no idea what I was doing.
So I drove her out to San Bernadino to drop off some presents for our friends (about half an hour away from the area we live around), and then made her put on a blindfold, turned around and drove back out to Newport beach, which took about an hour to get to. She isn't very good about being patient, so it was fun to torture her with that, and she kept asking me if we were there yet. My stomach was killing me- I could have eaten a box of antacids, but I knew what I wanted and needed to do, so I kept driving.
We finally get to Newport beach, and she hears the ocean, and she's asking me "Wait... we're not in San Bernadino, are we?" and I wouldn't say anything, which only frustrated her more. She really wanted to know if there was anyone else around, and I laughed and said "Well... maybe."
So I walk her around a bit, turning her, making her walk down a sidewalk and turn around, and then I leave her facing away from the beach- toward the little shopping mall that's right there. I tell her to slowly take off the blindfold, and I kneel down behind her with the ring box open.
I actually have her glasses in my pocket, because she couldn't wear them with the blindfold, and I didn't want to forget them, so she asks for them and I pass them too her, and she's staring at this line of shops, and she's like "I don't get it."
Finally she turns around to ask me for some sort of explanation, and sees me down there on one knee, ringbox open and everything.
Her first words:
"ARE YOU SERIOUS!?!?!?!?"She gave me a big kiss, and there were some surfer guys in the van near us who clapped and whistled and shouted congratulations.
Sara's next few minutes of conversation consist of alternating "Are you serious!" and "Oh my gosh!" but eventually I got a yes out of her.
So we're engaged.