Chris,
I was a gifted child, and I never quite stopped believing. Even after I was told it was my parents, it was so much fun to really think some amazing person came down and left presents that I didn't want to spoil it. As an adult, I still get all excited about Santa, even knowing that I buy the presents.
I'm not sure what I would say, but I do think that if he decides to continue to believe despite his friends saying that Santa's not real, it won't do him any long-term harm.

Lya