I doubt that there's any 'proper etiquette'. Every family is different. (I don't even really understand the concept of 'grief'. I've lost close friends and family members, including both my parents, and I've never grieved for anyone. I've just carried on as normal, usually refusing to attend funerals, which I regard as completely pointless. But I accept that others are different).
However a Christmas card serves to wish someone a happy Christmas. I see no reason why someone who has suffered a bereavement shouldn't want to express this wish to others, so they could send out Christmas cards as normal (but I'm sure that nobody would feel offended if they didn't).
When it comes to sending Christmas cards to a bereaved family, I'd probably choose a 'serious' card (rather than a 'jokey' one) and include a message stating that, despite their loss, I still hoped that they'd be able to find some happiness over the Christmas period.
Chris