That is the question.
We started out doing Santa, but the July that Reilly was 3 years old, she piped up, out of the blue, that Santa was going to bring her presents at Christmas. This bothered me because, as Christians, we had always wanted the main focus of Christmas to be the birth of Jesus, with Santa playing a more minor role! She had only had one year of really being IN to Santa anyway, seeing as the previous Christmas's she was completely oblivious to his exsistence, and I was a wee bit surprised at this sudden attachment to Santa. So I spilled the beans right then and there that Santa was based on a real guy named Saint Nicholas who gave presents to poor people and blah blah blah - I'm sure I talked completely over her head! - but I told her that we could still pretend about Santa and set out cookies for him and go and sit on his lap and everything. She was completely nonplussed about the whole event and not traumatized in the least. When Christmas rolled around, I believe that we did have to remind her, but it wasn't a big deal at all. He had just become a character like Barney or Mickey Mouse.
And I've been SO GLAD that we did that!!
Reilly is eight (and a half!) now, and Declan is five (and a half. HEY! Those halves are important!) and they just have a ball pretending about Santa. They talk about him and have their picture made with him and tell him what they want him to bring - Deco said a Red Ryder BB gun! HAHAHA! "You'll shoot your eye out, kid!" - and set out milk and fudge because Papa Clause likes fudge better than cookies and it's a blast. And, honestly, I feel like it's a lot less stressful on ME because I don't have to worry about them asking Santa for the one thing that I can't find in the store or wrapping the presents in different paper so that they don't figure it out. Or, like what happened to a friend of mine, one of them happening upon the presents in the closet that are "from Santa".
I don't know, maybe when The Kids grow up they'll wish that they had gotten the whole experience and they'll think that they've been slighted somehow, but I kind of think we've got the best of both worlds.