I must say I am getting rather tired of reading blog posts and web pages about Yule that claim all sorts of Pagan symbolism for stuff that only goes back as far as the eighteenth century, such as mistletoe (and I am a Pagan). If people are going to hold forth on this or any other topic, they should check their facts first. I guess it's partly a tit-for-tat response to the type of Christians who want to purge Christmas of Pagan influence.
People ought to read Ronald Hutton's Stations of the Sun: a history of the ritual year in Britain which debunks some of the wilder claims and establishes what is really ancient and Pagan about Christmas customs - namely, bringing greenery into the house, and giving presents (which was a Saturnalia custom).
As Adventus says, it's very unlikely that people knew the exact date of the solstice, but they would obviously have wanted to rest and feast during the short days and long nights around the solstice. Also, as he further points out, it's rather insulting to our ancestors to assume that they feared the sun wouldn't come back, or they were afraid of Odin.
Whatever, I think there are both Pagan and Christian impulses and symbolism in Yuletide and Christmas, and we should not try to purge the Pagan festival of Christian impulses, or the Christian festival of Pagan impulses, but rejoice in the delightful smorgasbord that is the season.
Actually, axial tilt is the reason for the season - but humans are storytelling apes, after all, and we love a good story. And the Nativity, whether true or not, and whichever god is being born in a cave or a stable, is a very good story.