How exactly does the iTunes gift card rush work? I hear about it every Christmas, but don't understand what it means.

You mean how people get iTunes gift cards for Christmas and then use them to buy music? What's not to get? *scratches head in confusion*

itunes makes the most money between Christmas and New Years Eve because ituens gift cards are popular christmas gifts. So companies ramp up promo on itunes at that time, there's lots of End of Year sales, stuff like that

Lots of people give them away as presents

It's a good gift imo...I like gift cards because I'm picky