I've been thinking about this "santa" thing and it's treated pretty flippantly.

When we were young my sister and I knew that "santa" was deeply implausible. Our parents never tried to convince us otherwise. They kept up the charade, though, because it was fun - we put out cookies, Santa did certain things, and there was stuff we didn't know about and there were things we couldn't explain. Mostly because "mom and dad did it" was a boring answer that sucked all the fun out of it, so we deliberately didn't give the answer much credo. "Santa" is a deliberate choice by all parties involved to pretend about. The parents know, the kids know, yet the parents "lie" and the kids "choose to believe the lie."

My daughter is not quite a year old. She has a favorite puppet. His name is Gus. He's a baby sloth. My daughter knows that I am Gus, that Gus does nothing without me making him do it, and that when Gus makes noises, my lips move. Yet she hugs Gus, she makes faces at Gus, she plays with Gus, and she treats Gus like he were a puppy she were playing with. Every now and then, she looks up and grins at me. We're playing Pretend and we both know it, and it's fun for both of us.

The Santa thing is no different. Saying parents "lie about Santa" does a disservice to play and the imagination.