We (my family and I) celebrate the gift giving and togetherness of Christmas. We do everything the Christians do except read the story of the birth of Jesus. We even let our kids believe in Santa. I figure, they won't believe in Santa forever (unless we try to be really, really convincing), so we should let them have the magic while they're young enough to appreciate it. There will be plenty of time for the horrors of the world later in life. And my feelings on this are only stronger since the shootings in CT. You never know when you're going to go, so enjoy the little things in life, and don't fret about that which is not important.
One thing I like to do is leave little clues that we are responsible for the Santa gifts so that they can figure it out if they want to.