MrMatt - I did not make the presents. I considered it, but found this set at walmart this year already lit and thought I would try them out. So far they've worked great, I wire tied them to the sleigh to keep them in place.
For the cutouts I try to start with decent 5-ply 1/2 inch plywood; fill any gaps in the edges after cutting with wood putty and finish them with 2-3 coats of quality exterior enamel. Occasionally a small split or delamination will start on a plywood edge. I've generally repaired those with gorilla glue, clamping the ply's back together, and touching up the paint. This has been the exception rather than the rule, but catching them while small keeps them from spreading. Storing them completely upright will help to keep them from warping. The original manger in the nativity set is approaching ten years old so I'm calling it a success.