My wife and i had this debate a little before christmas so i'll share my point of view.
The retail industry has made a mockery out of christmas and trumped up santa to the point where many people are stressed out, frustrated, and sick of christmas. Many Christian groups are calling for devout followers to give up the tradition entirely; i disagree.
Santa claus is a great metaphor for what Christmas is all about. Santa claus is God and the metaphor flows easily from there. All those tales about the naughty list and gifts of coal never pan out in the end. Santa brings gifts and glad tidings to all. Likewise, we christians believe that God gave his son to all, sinner and saint, that we may achieve salvation through him.
With this understanding, santa claus is a great tradition. It is unfortunate how often this goes overlooked and unless we teach our children this metaphor, santa will continue to be seen as just another part of the modern decadence.
Remember, all things in moderation.