I grew up with Santa Claus. I think I turned out all right. I know that Christmas is all about Jesus (although I did milk the Santa thing for a few extra years to get more presents, even after I'd figured it out). My wife, on the other hand, did not grow up with Santa as part of her family Christmas traditions. Her parents made the decision not to do the whole Santa thing.
So once a kid (and soon to be plural...click here for more on that) arrived on the scene, we had some decisions to make. We decided to do St. Nicholas' Day, which falls on December 6. We wanted to add a family tradition with some surprise and wonder, while at the same time teaching our children about who the real Santa Claus was. This way, we could insert some of the St. Nick fun, while having it early in the month to keep it from overshadowing our celebration of Christ's birth.
We have adapted some German traditions, such as putting out boots or shoes outside the door (we use the bedroom door, not the front porch) on the eve of St. Nicholas' Day. In the morning, the shoes are filled with sweets, fruit, nuts, and coins. Those gold-colored $1 US presidents coins work well...not to mention the gold foil-wrapped chocolate coins. I also save all the spare change I get throughout the year and go to the local coin store to buy collectible coins to give when the kids are older and will appreciate their value.
As our children grow, we will continue to tell them about St. Nicholas, and how he helped the poor and needy because he had faith in Jesus and knew how much he had been blessed by Jesus. And so, we also have made it a custom that we deliver a toy to the nearest "Toys for Tots" collection center on St. Nicholas' Day.
Later, we'll tell our children the history of the Council of Nicaea, which was attended by Nicholas, the Bishop of Myra. I'm sure we'll eventually get to the part where Nicholas put the smack-down on the arch-heretic Arius.