I don't have kids of my own, but I'm helping raise my niece and helped a lot when my cousins were younger. I remember BEING Santa Claus for my younger cousins, he was so excited when I came back to have seen Santa, but was sad because I didn't get to see him.
My parents did the Santa/Tooth Fairy/Easter Bunny thing with us, until we got old enough to call them out on it. I found out about Santa before my sister did, and one Christmas morning we were getting into the car to go to my grandma's for Christmas breakfast. My sister pointed up at the roof and screamed that Santa MUST have come the night before. Apparently a squirrel had run across the rooftop making it look like hoof prints in the snow. I knew better, but I let her be completely excited about it, and all day she got to tell people she saw the reindeer prints on our house.
Whenever my sister or I was enough to ask about the lies, we were told the truth. I remember going to visit my great grandma in the hospital with Alzheimer's and thought how terrible it was that she didn't remember us, but she said something to my mom that my mom told me that I'll never forget, and I'll never lie about mental illness to any child. My mom and g-grandma were sitting aside while all the kids played, it was grandma's birthday and we had all gone to visit because she was relatively healthy, aside from her memory. There were pictures everywhere and she just turned to my mom and smiled and said, "You know, these are the happiest people I've seen here in a long time. They're such a beautiful family, I just wish I knew who any of them were." Even though she couldn't remember us, we made her day so much better, and all the kids knew beforehand that she wouldn't remember us but that if she did, she would love us very much no matter what.