KK,
DF and I spent the week before Christmas in Morocco last year--I can highly recommend it. We spent 4 days in Marrakech and 3 days in Essaouira. If we had to do it all over again, however, we would have spent most of the time in Essaouira--we absolutely LOVED it there! Marrakech is beautiful, but to be honest, we found the polution and constant noise kind of hard to deal with--and I lived in Manhattan for 10 years! Essaouira, on the other hand, is a lovely coastal town, much more laid-back and friendly (and surprisingly liberal, considering it's a Muslim country). Wonderful restaurants and nightlife as well.
PS-The weather was gorgeous, warm and sunny during the day, but be warned--we needed hats and coats at night. Hope this helps.
Marybeth