I think it's a personal choice how people deal with this with their kids. But I had Santa, and the Easter Bunny, and the Tooth Fairy, and I turned out all right... for the most part........I will agree with Naemanson that I don't consider it a lie to reinforce a fairy tale. It's like a game, playing pretend... Pretending is fun. Any reenactor will tell you they never grew out of it!
Stories, fairy tales, and other assorted windies make life fun. But like I said, it's a personal choice how people raise their kids.