So I never told my kids that Santa was real. The first time that Santa visited them, it was actually Father Christmas as we were in England, they were three and one. They got an orange and a piece of chocolate shoved into their socks which were left by the fire, but by the next year, they had re-imagined Santa into hero status.
Over the years, I have never lied to them, but they have occasionally of their own wit decided to believe in him (just as they have believed in Batman and Jesus and Zeus). "If Santa's not real, who drives those flying reindeer." --Boy One when he was Age 5.
As a non-Christian, I can't tell them that Santa's real while also telling them that I don't think that the baby Jesus is a god. I certainly don't want to push the gross-Santa stuff over the great-Baby Jesus stuff. I love the nativity story. It's so sweet, and all of the Jesus metaphors resonate so well with the light traditions that have been carried on for thousands of years by people during this time of the year when the world is the darkest. Santa, on the other hand, mostly represents consumeristic crappy bullshit, and I'm not going to push that story.
I like talking about it the Santa myth though. The other day, we were talking about when flying reindeer where added to the myth (probably about 200 years ago when The Night Before Christmas was written and the author described the reindeer flying to the roof). Boy One added that Santa did not fly in the Christmas scene in the Little House in The Prairie books. "Christmas was a lot different then. First of all, Santa was real," he said, and then, he went on and said a lot of other adorable things.
However, it's pointless to lie. Kid's brains aren't like ours--they're more fluid and less locked in dualism like fake and real. They can completely believe and completely not believe. When the stockings are found on Christmas morning, they completely believe in him. (even though they really know that it was me that slipped in the thrift store book, the deck of playing cards, and the candy).
I'm not ruining childhood by not lying to them about Santa. I'm just recognizing childhood for what it's capable of which is a hell of a lot of magic.