What I do with my dd is to carefully craft my responses. I have told her all of the Santa Claus stuff without lying, with such expressions as "Its been said", and "I've been told." I personally believe there is a value to figuring out fiction as fiction. It is much like figuring out a riddle for oneself.

Religion is tougher at our household. The wife and I have different beliefs. If it were politics it would be like Mary Matalin and James Carville.