Question
Is it okay to mulch bare veg garden over winter with wood chips? I have a pile of them, mostly cedar and balsam, chipped from downed branches that have been sitting in a pile since mid-summer so are starting to decompose.  

Answer
There are differing opinions as to the toxicity of using cedar as a mulch.  We never mulch with cedar because of such varying opinions about its toxicity.
Pro:
You can find references discuss the phytotoxicity of cedar when used as a mulch around young plants at:  http://www.ext.colostate.edu/PUBS/GARDEN/07760.html#cedar and at: http://permaculturetokyo.blogspot.com/2006/05/mulling-over-mulch.html
Con:
Chip and sawdust mulches from some woods, such as walnut and cedar, produce phytotoxic (plant-killing) chemicals and should be avoided. This toxicity phenomenon is called allelopathy.

Any kind of wood chips larger than 3" are least likely to compact. Caution must be used, as chips that have not been composted or "aged" can be toxic to tender plants during the decomposition process, and will rob nitrogen from the soil.