The following comes from the Women of Faith and Family site:
The Church's celebration of Epiphany ("manifestation), the "twelfth night of Christmas," apparently originated in Egypt sometime during the third century, thus the Church's celebration of this feast predates even the celebration of Christmas itself.
Epiphany is traditionally celebrated in honor of Christ's birth, of the adoration of the Magi, and of the baptism of Christ's (also celebrated on the first Sunday following Epiphany), three manifestations of the Lord's divinity.
Because the Magi came form the Orient, many of the traditional foods served on this day are spicy. Spice cake is often baked for dessert, and entrees may include curry powder or other pungent spices.
Several lovely family customs are associated with Epiphany. It is on Epiphany that the Christmas creche is finally completed, as the figures of the three wise men at last arrive at the crib. In many families, the wise men are moved a bit closer to the crib every day from Christmas Day until Epiphany. Also, recalling the gifts to the Infant Jesus, many families exchange small gifts.
A time-honored custom (especially in France) is the baking of a cake with a bean or trinket hidden inside. The person whose cake contains the bean is made king of the feast. Processions of robed and crowned "wise men" to the manger are fun for little ones, and provide them with an opportunity to think of a good deed that they can offer as a gift to Jesus.
The blessing of the home is also a popular Epiphany custom. using specially blessed chalk (your parish priest will bless the chalk, if you ask, or use the prayer of blessing below), many households mark their entrance door with the year and with the inscription CMB, the initial Caspar, Melchior and Balthasar, the names of the three wise man in legend. The inscription also stands for Christus Mansionem Benedicat, which means "Christ, bless this home." The popular form the inscription takes is 20+C+M+B+03. It remains above the doorway until Pentecost.
In England, Twelfth Night was traditionally celebrated with a drink called Lamb's Wool, made of cider or ale, with roasted apples and sugar and spices. It was the custom to bless apple trees on that night by pouring a libation of cider on them. For more go here.