When Gigi was four, she got it in her head that Santa was just me.
So I set her straight by calling Santa (my brother) and having her talk to him to verify that he's for real ("I'm real, HO Ho Ho," said my brother in his best Santa voice) and that he's watching her. I don't know if she bought it, but she was certainly looking forward to her presents.
Sometimes I wonder if it's the kids that are indulging the adults when it comes to Santa Clause: "Let's play along with this silliness; what the heck, we'll get some presents."
If so, the joke's on them, 'cause I get the milk and cookies.