We don't do Santa either. DD knows about Santa the character because it is unavoidable, but we tell her he's a pretend character or game people like to play. We will continue explaining this year that some kids believe Santa is a real person and we don't spoil their surprise. I was raised with this idea myself.
We are Christian and while we do some 'secular' traditions like the tree and stocking, not playing into the Santa thing is more than just that for me.
I hope I don't get flamed for saying this- so those who disagree just know this is my own perspective.... I feel that it isn't fair to take advantages of a child's youth, imagination, trust, and blind faith in their parents to take advantage and essentially lie about big things like the Santa fantasy. I want my children to know that I would never mislead them, lie to them, or hurt them - especially over a game. Some kids are seriously upset when they learn Santa isn't real. I feel it can create a sense of distrust in adults- 'what else have you told me that isn't true'.
I work in the infant mental health field and decided long before I had children that I would be very careful in not abusing my child's innocent faith in me. Of course my daughter lives in a world of fantasy of her own with pretend play and as she tries to figure out how things work ... And I'm definitely not talking her out of that or spoiling her own fantasies and imagination or expecting her to get a hard dose of reality about everything. What I don't do is make up stories and convince her they are true or use them to my advantage.