Interesting Thread. We have never told our children that Santa is real and never played it up much. We have read stories about Santa and watched a couple movies. We did wrap a couple presents with Santa's name on it, but that was it. DS6 never asked or talked about it until last year. Recently he told me that he does believe in Santa, but does not believe in the whole flying reindeer thing and knows that is not possible. He somehow thinks that Santa goes around in a plane or rocket. He clearly does believe in the Santa part though. I am a little concerned because he is in a class with 4th graders and also around older kids for some things he is involved in. I am sure someone will tell him Santa's not real. My answer will be some believe in Santa and some don't. DD3 has recently started asking questions about Santa. Also, we have never gone to the mall to sit on Santa's lap, and he knows that people dress up as santa. We don't do the easter bunny thing and he is pretty questioning of the whole tooth fairy thing too. This year he decided to get a present for Santa and put it under the tree (a hat for one of santa's elves because he figures that they can use it and pointed out that poor santa never gets presents). We only do one or 2 presents from Santa and the rest are from us and the kids know that anyhow. And never have I told them about being good for Santa, I am a fan of behaving because you should and it is respectful...not because Santa might not give you presents.
Growing up my parents never told me Santa was real...but I had that desire to believe so I did. I think a lot of kids just love to believe and pretend. I work with 4 and 5 year olds all day and it is amazing how much they want to pretend and believe things!