I've heard and made the argument myself that you shouldn't tell your kids about Santa Claus because it will eventually undermine their trust.
But now that I have two children, I have not disabused them of the idea that there is a Santa Claus. Telling a child a story that is part of your culture's mythology is not the same thing as lying, not by a long shot. My oldest son learned that Iron Man isn't real, and magic doesn't exist, and it hasn't affected our trust relationship at all.
What is important is that we don't use Santa as a threat or promise to ensure good behavior in our household, and also Santa only brings one present. The rest come from family members.
He will figure it out on his own, like when he realized that his favorite superheroes weren't real, and when he asks us point blank if Santa is a real person, we will answer truthfully.
For the record, as the youngest of three, I never believed in Santa Claus, but I still remember the breathless anticipation of Christmas. I firmly believe that I was not warped from knowing that he didn't exist. I remember my parents telling me that some kids really liked to believe he was real, so I should play along. I'm guessing they didn't want me to be the kid who told all the other kids.