Ho Ho Huh?

Here is a question I have been pondering and I would like some opinions.
 
Those of you with young children - in what way have you introduced your children to Christmas?  Do you tell them about Santa, or Jesus, or both?  Jacob is too young to have to explain things to but I am not entirely certain of what route I'd like to take with this...

I mean, sure I had fun believing in Santa, and I wasn't traumatized when I found out that he was a hoax, but do I want to go that route with my child?  What if it does hurt him to find out the truth?  How will he feel when he finds out that Mommy and Daddy, the beacons of truth in his life, lied to him so extravagantly?
In a way, I don't even want to get the Santa thing started.  I want him to treasure Christmas as the birth of Christ.  I want him to be giddy with the spirit of giving, not caught up in what gifts he will receive.

And then I wonder if not telling my child that Santa exists will cause problems with the parents of other children in the future.  This is in no way a deciding factor, just something I am curious about.  When Jacob reaches elementary school and the kids are discussing Christmas, when he expresses our traditions and views, will he send some innocent child crying home to his or her mother, demanding to know if Santa really does exist?

Oh the things that tax my mind.  Let me know your views/plans on this.