I made it a point very early to tell my kids the truth, period, and to encourage everyone else to do so, as well. Age-appropriately, of course, so when my then-6-year-old asked about sex, she got an answer that would make sense and not scandalize anyone when (not if) it was repeated to the neighbor kids.
And yes, that includes blowing the whistle on Santa Claus, the Easter Bunny, the Tooth Faery, honest politicians, and other fictional characters. She's grown up a happy atheist, with a nice, functional baloney detector, as a result.
Lying about everything seems a pretty good strategy. As long as children have the opportunity to test and find out the truth for themselves, they should learn to doubt anyone who claims to have answers.
I might tell a lie to spare someone's feeling (adult or child). I was the child that told everyone that there was no Santa Claus (at the tender age of about 5). I also blew the whistle on the Easter Bunny at the mall (probably about the same time).
Missing "Queen of England?" From the film Megamind : "You see the good in everyone, even when it's not there. You're living a fantasy. There is no Easter Bunny. There is no Tooth Fairy. There is no Queen of England. This is the real world, and you need to wake up!"
one moment... 18 (or more..58now!) monks tell their children that Santa Claus does not exists!!??!?
(the true lie about santa is his color: it was ever green dressed; a bad-respect-for-workers company changed it to red for an advertising campaign... can you imagine a forest's spirit red dressed? life expectetion 5 minutes..)