Most of what we've told the girls about Santa has been in relation to the historical Saint Nicholas, peppered in with some info about his "helpers" that you see dressed up around the malls and finally topped off with a small amount of whimsy as the "elves" bring the girls goodies every morning in the Elf Pails hanging on the Christmas tree. It makes for some interesting questions, such as "How do the elves get to our house every morning? Do they walk?" (we thought that perhaps they take Santa's sleigh out for a spin...)... until... "Is Santa up in Heaven?" and then it all gets a bunch more muddled from there.
At the post office a couple days ago Eileigh spotted the little red mailbox for the Santa letters and insisted that she get hers mailed off. I think it had more to do with the stamping and mailing than it did with Santa but she proudly drew her snowman and then asked me how to spell Santa's name, carefully writing each letter after I said it. Just so you know, she didn't scribble over his eyes, she just colored them in because they needed to be brown. (This was with a black pen. Eh. You win some, you lose some.)