Santa Claus is A-okay in my book.
I want my kids to believe in Santa....I think it's important to believe in "magic" at a young age. It represents innocence and all that.
If a kid doesn't believe in Santa, that's cool -- but don't be obnoxious about debunking Santa or proselytizing to my kids on the school yard.
Disclaimer: I am referring to the kids I have not yet had.