I recall with vivid clarity that I was totally devastated and felt betrayed when my parents sat me down and told me there was no Santa Claus. I wept for like two solid days. Then again, I was a pretty naive and sheltered little dude. And I demanded to know when I was like 8, which really was not an age where I probably could have emotionally handled it like most people who were like 10 or even 12 when they finally discover through their friends.
Be that as it may, I raised my son with Santa Claus at Christmas. Childhood is a time for magic. There is plenty of time and opportunity to learn that the world isn't as magical as we believe when we're kids. Besides I think it helps develop creativity and imagination and wonderment in kids. Also, St. Nicholas was a real person, so their is some truth to the whole Santa mythos. When my son was around 11, he told us that he and his friends had figured out there wasn't a Santa. So we discussed that Santa was of course not a real dude who rode around on a magical sleigh, but represented more the spirit of giving. He dug that, and accepted it very well. And he got to experience years of magic and excitement as a little guy.
Then again, we also taught him to understand the true meaning of Christmas all along, which probably helped.