From PEOPLE Magazine Click to enlarge
THE PREGNANT PRINCESS

Kate, Duchess of Cambridge

IT WAS NEWS THE WORLD had been waiting for. From the moment she swept into Westminster Abbey in Sarah Burton lace and rode out in a horse-drawn carriage, a newly minted princess, the former Kate Middleton stepped into her royal role as easily as she slips on a pair of Stuart Weitzman wedges. Whether giving her first solo speech, chatting up the Queen at Jubilee celebrations or engaging in adorable PDA with her man at the Olympics, Kate, says Majesty editor Ingrid Seward, "does everything right." So when, on Dec. 3, she and Will let us in on the joyous news that a royal heir or heiress (or, we can only wish, both?) was on the way, it seemed the perfect ending to a perfect year.

Well, almost perfect. 2012 did hold a few bumps (ahem) for Kate and other members of the Queen's clan (paging Prince Harry). But when topless pics of Kate were published, the public-and the Palace-rose up in outrage and defense of the princess and her privacy.

Now we have all the more reason to cheer Kate on, as she battles acute morning sickness-a rare condition that may last the full nine months. Already the joy has been darkened by the suicide of Jacintha Saldanha, one of two nurses at King Edward VII Hospital who fell for a prank played by two Australian deejays. But no one who knows her doubts this princess-who stopped the presses with a haircut (sideswept bangs!) and, weeks along, in 3-in. heels, charged into a pickup field hockey game with kids-has the mettle to get on with it. "Kate will cope with this challenge," says her friend, stylist Nikki Pennie, "with dignity, strength and courage."

What's her secret? Look no further than the smitten-as-on-his-wedding-day Will. At a University of St. Andrews fund-raiser in November, he thanked his alma mater for giving him "the woman I love." Says Pennie: "They are each other's rocks." And that is no fairy tale. So, 2013, bring on the royal baby.

The QUEEN

A SMASHING YEAR

The normally stoic monarch showed a distinctively merrier face this year. And who could blame her? Celebrated by millions during her Diamond Jubilee festivities, "parachuting" into the Olympics with James Bond and now anticipating the birth of a royal heir, Elizabeth, says Colleen Harris, former press secretary to Will, "is really happy."

Royal SCANDALS of 2012

HARRY: NAUGHTY,

NAKED & NOBLE

He gave new meaning to the Las Vegas Strip when he was snapped in all his royal buffness while partying with pals in Sin City in August. The tabloids had a field day and pundits clucked, but 28-year-old Prince Harry, now serving in Afghanistan, has little to worry about. "Nobody," says royal expert Judy Wade, "will like him any less."

KATE: TOPLESS

PHOTO TRAUMA

She was the image of modesty-veiled for a visit to a Malaysian mosque-as French magazine Closer hit newsstands with images of the princess sunbathing topless with her husband in southern France. The Palace took legal action and France opened a criminal case. Kate is unscathed. "She is," says royals author Wade, "a wonderful example of grace under pressure."

THE FALL SURPRISE

Britney Spears

What did The X Factor judge-who released the new single "Scream & Shout" with will.i.am-find most amazing about 2012? Her sons. "I listen to them read me books now!" says Spears, 31. Plus, "Doing this show has made me come out of my shell."

THE COMEBACK KID

Matthew Perry

Perry's winning role as a member of a group therapy session on the NBC comedy Go On hits home for the actor. "As dorky as it sounds, I'm always on this continuing path of trying to become a better person," says Perry, 43. "This is the happiest I've ever been."

The COOL COUPLE

Blake Shelton & Miranda Lambert

Combined, they won 11 major awards this year. But Shelton, 36, and Lambert, 29, are even more beloved for their fun-loving take on life. Here's how Shelton shot down rumors they're expecting: "I hope not," he tweeted. "[Miranda's] passed out with a bottle of Bacardi in her hands!!!"

5 SPECIES named for Stars

LADY GAGA

Gaga germanotta, one of 19 types of fern.

BILL CLINTON

Etheostoma clinton, a freshwater darter fish from Arkansas.

BOB MARLEY

Gnathia marleyi, a crustacean found in the Caribbean.

Beyoncé Knowles

Scaptia (Plinthina) beyonceae, an Australian horsefly.

PRINCE WILLIAM & DUCHESS KATE

Vanda William Catherine, a hybrid orchid.

THE AGENT PROVOCATEUR

Claire Danes

"I am perpetually pinching myself for having such a fabulous gig," says Danes, 33, of her Emmy-winning turn as Homeland's bipolar CIA agent. But it's her next big role-doting mom-that she's looking forward to most: She and husband Hugh Dancy, 37, are expecting their first child in the new year. Danes can't wait to simply "get to know our new Dancy."

THE FREE AGENT

Katie Holmes

Katie Holmes secured her exit from Tom Cruise's empire so swiftly and surely, she was embraced by the public as a brave, even brazen self-emancipator. It was as if Anne Boleyn outwitted Henry VIII. Suddenly she was gone from Hollywood-out from under Cruise's shadow-and living in New York City. She enrolled daughter Suri in school, starred in a Broadway play and, in short, gave every indication that "Mrs. Cruise" had been left at the curb. Whatever had pushed Holmes's button, she fired first.

THE SWEETHEART

Jennifer Aniston

She shot a saucy role as a stripper in We're the Millers and embraced her roots by promoting a hair-care line, but Aniston's biggest joy this year stems from a certain bauble that can now be found on her left hand, courtesy of actor-screenwriter Justin Theroux, who popped the question in August. Sums up the 43-year-old actress: "I'm a pretty happy person."

THE NEW A-LISTER

Jennifer Lawrence

Three things fans learned this year that the actress, 22, can do: 1. Shoot arrows like an Olympian (see The Hunger Games). 2. Perform a ballroom dance medley with Bradley Cooper (see The Silver Linings Playbook). And 3. Wrack up more stellar reviews for her film work. Three things she can't do: "I'm not a good cook, I can't clean, and I can't sew," she told W. And one big question for 2013: Will the odds be in her favor when the Academy hands out its Oscar nominations?

4 CHILDREN'S CHARACTERS in the News

BIG BIRD

Mitt Romney threatened to cut funds to the avian and PBS.

ELMO

His puppeteer was accused of inappropriate behavior.

MINNIE MOUSE

An N.Y.C. store drew jeers for depicting her as a superthin model.

PRINCESS SOFIA

Disney backpedaled on whether its newest princess is Latina.

THE SLIM-DOWN QUEEN

Paula Deen

She took heat from critics of her cooking after she revealed her type 2 diabetes diagnosis in January, but even Deen didn't believe she could drop 40 lbs. "I'm stronger than I ever gave myself credit for," says the southern cook. "Every year I count my blessings and think, 'It won't get any better.' But somehow it always manages to."

THE FUNNY GIRL

Mindy Kaling

As a kid, "I never thought there were any closed doors," says Kaling, 33, who kicked them open to call the shots on FOX's The Mindy Project. "It's the best mix of all your friends, and you get to boss them around!"

THE MYSTERIOUS MOM

Adele

The world's most famous pop star, 24, was also its most reclusive. After cleaning up at the Grammys for 21-which has sold more than 25 million copies worldwide-the Brit virtually disappeared. In October she popped up (in voice only) to release the hit James Bond theme "Skyfall," but for now, music's Greta Garbo is enjoying life in London with beau Simon Konecki and their newborn infant son whose name, of course, has been a secret.

THE DREAMBOAT

Channing Tatum

Here are a few ways to tell you've had a hell of a year: 1. Fans flock to see you strip down to your skivvies in a movie called Magic Mike. 2. You're crowned Sexiest Man Alive! "My friends are never going to let me live this down," says Tatum, 32, of his title. 3. You find out you're going to be a father (with wife Jenna). "Hopefully I will be the cool dad," says Tatum. "I want to be a buddy."

5 Stars who had CONCUSSIONS

JUSTIN BIEBER

He crashed into a glass wall while performing in Paris in May.

MELISSA GILBERT

Gilbert was hurt while on Dancing with the Stars in April.

KATHERINE JENKINS

Jenkins suffered her DWTS injury in May.

KRISTEN CHENOWETH

In July she was struck by a light fixture on-set.

LADY GAGA

The singer was hit by a pole during a New Zealand gig in June.

THE WILD CHILD

Honey Boo Boo

She landed a spot on Jimmy Kimmel Live!, scored higher ratings than the Republican National Convention and introduced several new words (among them, redneckognize and sketti) into the national lexicon. At 7, Alana "Honey Boo Boo" Thompson says the highlight of her year was "riding in race cars." (Translation: airplanes.) As for her favorite celebrity encounter, "It would have to be my mama. She's famous because she's on Here Comes Honey Boo Boo."

THE DISGRACED GENERAL

David Petraeus

"I screwed up royally," he told a friend after admitting to an affair with his biographer Paula Broadwell. He resigned as director of the CIA on Nov. 9, and though wife Holly has stood by him, he remains under investigation.

THE NUMBERS GUY

Nate Silver

His stellar presidential prognosticating made the New York Times polling guru, 34, an election-year must-read.

The CRUSADER

Malala Yousafzai

The Pakistani 15-year-old survived after being shot in the head Oct. 9 by a Taliban gunman for advocating for girls' education. The United Nations declared Nov. 10 Malala Day.

5 Stars who changed THEIR NAMES

SNOOP DOGG

The rapper decided to upgrade his name to Snoop Lion.

LILY ALLEN

The British songstress is now known as Lily Rose Cooper.

JERMAINE JACKSON

The singer filed a petition to change his last name to Jacksun.

JESSICA BIEL

Her stage name stays, but the newlywed is now a Timberlake.

CHAD OCHOCINCO

The footballer went back to his original surname, Johnson.

THE SHOWSTOPPER

Anne Hathaway

"I was always a musical-theater fan," she says proudly. So playing Fantine in Les Miserables-a role that required her to lose 25 lbs. and shave her head-was, of course, "a joy." And it might win her an Oscar. Yet her happiest moment of 2012 was Sept. 29, when she wed Adam Shulman in Big Sur, Calif. She told Vogue, "To have [everything] come full circle in such a spectacular way-it's making me very happy."

SPEEDO SHOWDOWN

Michael Phelps

Ryan Lochte

2012 MEDAL COUNT

4 gold, 2 silver

2 gold, 2 silver, 1 bronze

POST-OLYMPIC COUP

Launched an ad campaign for Louis Vuitton

Made cameos on 90210 and 30 Rock

MEMORABLE TWEET

I love my friends!!!!!! Weeeeeee

Always reach for the moon cuz if u slip up u will still be a star!! #Jeah

4 more PEOPLE who made their MARK

PATRICIA KRENTCIL

The "Tan Mom" accused of taking her 5-year-old daughter to a tanning booth says, "I haven't tanned since this happened."

JENNIFER LIVINGSTON

"I'm so glad I took a stand," says the news anchor who responded on-air to a viewer who criticized her weight.

KAREN KLEIN

The taunted school bus monitor says she's now "committed to making a difference" via her antibullying foundation.

SANDRA FLUKE

"It was important to fight for that policy," says Fluke, who was blasted by Rush Limbaugh for supporting insurance coverage for contraceptives.

THE REBEL

Lena Dunham

Whether pushing buttons with her HBO hit Girls or making jaws drop with a bare-it-almost-all skit at the Emmys, Dunham dared to be different. And it paid off: She nabbed Emmy and Golden Globe nods and a book deal to boot. But the star, 26, still wants to keep it real. "I definitely don't have any feeling of being famous," she says.

THE VIRAL STAR

PSY

"Gangnam Style," the Korean rapper's smash, had it all: a crazy horse-riding dance, a catchy chorus and a video seen more than 900 million times-a world record. (That was before Psy's old anti-American song surfaced.) But does Psy-real name: Park Jaisang, 35-worry he won't be taken seriously? "It's not a matter. If I'm recognized as a rapper, dancer or a ridiculous guy, I'm open to anything."

5 Former Child STARS who had a BAD YEAR

LINDSAY LOHAN

This time it was car crashes, IRS trouble, more family feuds and a bar fight for the Parent Trap star, now 26.

ERIN MORAN

The 52-year-old Happy Days actress got evicted from her home.

AMANDA BYNES

The former Nickelodeon star, now 26, faced a DUI charge and two counts of hit and run.

MACAULAY CULKIN

The haggard looks and odd behavior of the Home Alone kid, now 32, had friends concerned.

EDWARD FURLONG

The 35-year-old Terminator 2 actor was arrested on domestic violence charges.

THE CHART-TOPPER

Taylor Swift

This year had the pop-COuntry superstar, 23, seeiNg red—as in her signature lip cOlor, the polka dot bikini she woRe HAnging out with a ceRtain ex-boyfRiend, and the title of her No. 1 album, where her lYrics and liner notes (filled WitH messages spelled Out In capital letterS) revealed secrets of past romaNcEs. She's eXplained, "If I let my fans into my life ... it kind of connecTs us."

5 Stars who CAME OUT

ANDERSON COOPER

"There is value in standing up and being counted," he wrote.

JIM PARSONS

The star's orientation was revealed in a New York Times profile.

JILLIAN MICHAELS

"I never want my kids to grow up and think that I'm ashamed," said the fitness guru.

MATT BOMER

While accepting an award, the actor thanked his partner.

FRANK OCEAN

"I don't have any secrets I need kept anymore," wrote the R&B singer.

THE FIGHTER

Robin Roberts

Five years after battling breast cancer, the Good Morning America anchor, 52, is recovering from the bone marrow transplant she had Sept. 20 to treat a rare disease that can lead to leukemia. "It's the hardest thing I've ever done," she told PEOPLE.

THE DOUBLE THREAT

Ben Affleck

The actor had the kind of year that made even George Clooney jealous. Of Affleck's triumph directing and starring in Argo, Clooney (who produced the thriller) said, "I'm envious of his talent. This is as good as it gets." Says Affleck: "I'm very lucky. I have to knock on wood about my life."

The Hall of Shame

DONALD TRUMP

The billionaire went on vicious Twitter tirades against Cher, Rosie O'Donnell, President Obama and others. "It makes me feel so good to hit 'sleazebags' back," he tweeted.

FRANCESCO SCHETTINO

After running the Costa Concordia into a reef, the captain abandoned his ship, passengers and crew. More than 30 people died.

LANCE ARMSTRONG

The cyclist was stripped of his Tour de France titles after the U.S. Anti-Doping Agency concluded he'd used performance-enhancing drugs.

JOHN EDWARDS

The ex-senator beat the rap on campaign finance fraud charges, but his trial laid bare all the sordid details-lying, cheating, a sex tape-of his secret life.

ANN COULTER

After getting flak for calling President Obama a "retard," the unapologetic pundit lashed out at her critics, calling them "bullies" and the "word police."

TODD AKIN

The deluded Missouri congressman said "legitimate rape" victims rarely get pregnant because the female body can "shut that whole thing down."

THE NEW HEARTTHROBS

One Direction

The English-Irish boyband One Direction-(from left) Niall Horan, 19, Louis Tomlinson, 22, Harry Styles, 18, Liam Payne, 19, and Zayn Malik, 19-scored two No. 1 albums and sold out this (and next) year's world tour. One member even landed a Grammy-winning girlfriend (Harry dates Taylor Swift). "It's pretty crazy to think about it," says Harry of their year. So how do they cope with all that touring? "Phone, laptop and hair product," says Niall. "It's hard to make your hair stand up like this without it."

3 More STARS who made a BREAKTHROUGH

MACKENZIE FOY

The 12-year-old made her film debut—as Bella and Edward's child Renesmee-in the final Twilight movie. "I'm ready for everything that comes with it," says Foy.

KATE UPTON

The model, 20, made a splash as the curvy cover-girl of Sports Illustrated's swimsuit issue. Being confident "doesn't mean starving yourself," Upton told Vogue.

CARLY RAE JEPSEN

Her Grammy-nominated "Call Me Maybe" became the anthem of 2012. "It's taken me on an adventure!"says the 27-year-old of her breakout song.