We also saw the space shuttle Discovery and the Space Telescope on
Christmas night, just as you described. My wife was the first to recognize
that there were two objects, not one, so she gets the credit!
the shuttle released HST at 3:03 p.m. PST. At 3:39 p.m. CST Discovery fired
its steering jets to change its orbit slightly, so that it would begin
orbiting faster than the telescope and move away at just under 6 statute
miles per orbit. When we saw them, about three hours (i. e., about two
orbits) later, they would have been about 12 miles apart. The spacecraft
altitude was about 400 miles, so the two objects would have been a bit less
than 2 degrees apart in the sky --- which agrees pretty well with what we
saw.
We also noticed someting else quite curious --- a narrow, faint band of
luminosity extending along the orbital path of both Discovery and HST. This
was about 2 degrees in length and about 2 or so degrees ahead of Discovery
(i.e. to the east) in its orbit. I suspect that this was exhaust from
Discovery's engine burn, which had fallen into an even lower (and hence
faster) orbit due to interparticle collisions. What do you think?
Another nice place to find spacecraft sighting information is