My kids don't really believe in Santa Claus. In our house, Santa helps us celebrate Jesus' birthday. They think he's a funny story and when they ask about him we use our imaginations to come up with stories about how he can fit down chimneys, etc. We try to be careful to tell them not to go around announcing that Santa isn't real to their friends...and so far they haven't ruined the dreams of other little ones by spilling the beans.
Each year since Elliott's first Christmas we have taken the kids to get a picture with Santa. It's actually been the same Santa too. This is the first year no one cried.
Henry was a little freaked out and just stared. (but he does that to everyone so nothing new there)
Isa refused to look at Santa and bit the insides of her cheeks the whole time.
Emma kept whispering "I want makeup" to Santa. Hmmm...too bad Mommy pretended not to hear that one. :)
And Elliott was smiley and friendly for the first time as he sat next to Santa.