It's the first two lines of the first verse that confuse me. Here's what I came up with:

[This] Holy night, I greet you, [you who was] born [in] the day
to be beheld - oh joy! - I also was chosen by God.
Your blissful splendor allays all sighs, all fears,
I delight in your blessing; holy night, I greet you!

The gentle ray of your light that dispels death
and renews Life altogether wonderfully,
O how blessedly, how purely it permeates me with bright radiance
and drives away the dark torment; the gentle ray of your light.

I haven't worked on the third verse.

I interpret the night as being a metaphor for God the unseen and ineffable, who has given birth to the visible "day" (Jesus Christ), thus issuing in a new spiritual age. So the night can indeed have it's "gentle ray", in contrast to the mundane night. But given that my translation could be wildly wrong, don't place much weight on my somewhat fanciful interpretation.