[Irreligious]

You don't have to teach your kids to believe in Santa if you live in a culture where images of Santa Claus are pervasive this time of year. They'll pick up on the belief without your help. If you don't want them to believe in Santa, then you'll probably have to actively discourage such beliefs.

Personally, I think it's harmless, since they all outgrow that particular fantasical belief well before they hit puberty.

It's perfectly natural for children to view the world as a magical place. It helps them to cope with a lot of confusing and complex notions that are entirely alien to them. They're new people, after all.

Besides, they have to be acquainted with fantasy if they're ever going to be able to distinguish it from that which is real. And indulging fantasy can have the side benefit of encouraging them to think creatively. The idea of humans soaring above the clouds was, necessarily, relegated to the realm of fantasy 150 years ago. But it was creative minds that figured out how to approximate the fantasy and begin to conceive of it as something that could actually be a "real," concrete human experience.