Thanks toomanyshoes. I just worry that my DD will spoil it for other children, whose parents won't be happy with me then. :-|

Just Me - It sounds like you are taking a similar approach to me at the moment. I am not telling DD that Santa doesn't exist, but I'm also not telling her that he does exist. My DD has also seen Santas about this year and she asks me who they are. I just tell her that they are Santa, but don't go on to say "and he's not real". One idea my DH had was to tell her that other children receive gifts from Santa but we wanted to give her gifts from ourselves. I wonder if she'll then be sad that Santa doesn't give her gifts though. The hard part for me is that we spend Christmas with DHs family and we have two nieces who are all into Christmas and Santa. So it just seems expected that our DD will also believe.
Extended family make it more difficult especially when they do things very differently and you spend Christmas day with them. I grew up knowing Santa wasn't real so I never felt sad that I didn't get presents from him. Strangely though, we still left cookies and coke for Santa though we knew that Mum and Dad ate it all after we went to bed.

I think you will find a way to do it the way you want to. You can only deal with issues as they come up - be aware of things that could create problems but some of those things may never eventuate into issues. It's just good to be prepared if they do.