Honestly I will probably do as my parents did. I will buy christmas presents, label them "From: Santa", and I'll put them under the tree in the middle of the night, and I will decline to explain how they got there. My children can choose or decline to believe whatever rumors are swirling around the neighborhood.
EDIT: personally I never asked about it because I didn't want to risk stopping the gifts.
That is pretty much what my parents did. I turned out alright. And that is pretty much what we are doing. I would rather my kids blindly believe in Santa than blindly believe in God. They will need to reach an age where they must question both of those things for themselves.
EDIT: personally I never asked about it because I didn't want to risk stopping the gifts.