Wow. Tough one.
In all honesty, as one of the minorities who should 'keep their traps shut' (as stated by a PP) regarding majority culture celebrations in public schools, I'm more than a little hesitant to voice an opinion here.
But I will anyway.
I'm one of a very, very tiny minority...Orthodox Jews who have their children in a public school (most Orthodox Jews will only send to private religious schools for precisely these kinds of reasons). Because of where we now live, and the needs of my family, a yeshiva is not an option for me. My oldest two children are in a public charter Montessori school, which thankfully in its embrace of diversity, strives to accommodate rather than create division.
Having not grown up Orthodox however, as one of a very few Jewish children in a public school system which was 99.9% Catholic (and all went to the same church), I can personally attest to the feelings of bewilderment, exclusion, loneliness, isolation, and occasionally prejudice that befall minority children in a majority culture during the "Holiday Season." Younger children especially suffer as they are rarely equipped with the cognitive or emotional skills to deal with these kinds of challenges -- and that is true even if their home environment is highly supportive, and very identified with their own 'culture'/religious tradition.
I don't think it's really possible for others to understand this kind of isolation. It's a very difficult concept to explain, and unless a person has experienced it deeply for an extended time, even more difficult to appreciate on a level which would express real empathy. Thus you get comments like 'they should keep their traps shut' or 'suck it up.'
As an individual, I know that my children understand their differences and celebrate and appreciate them -- and that because of their home life and background, are not as threatened by the isolation that comes with being different. Still, this season has presented real challenges for them. I have kept them home at a variety of times for just this reason (and yes, Halloween, Valentine's Day, and St. Patrick's Day are all also celebrations in which we have no interest and my girls will be at home when those festivities take place). They know that Santa and all the other Christmas stuff is for Christians, not for us. They understand Santa isn't real and are under strict orders not to discuss that with friends at school (lest they reveal it, I don't want my kids to be held responsible for being 'spoilers').
If I know Santa is coming to school, my kids will be at home that day. I neither want them taking part, nor being spoilers for others. I am sad I would have to make that decision, but as part of a minority there is a reality that sometimes it's better to keep a low profile and not rock the boat too much. As much as I might like to oppose what I would conceive an inappropriate use of school time for a religious celebration, I won't make my kids a target.
I see no traction in arguing that Santa is a secular symbol. For us he is decidedly Christian, and part of the celebrations of Christians and those who celebrate Christmas. We are neither Christians, nor do we celebrate Christmas, and Santa is not for us. End of story. When Santa is part of the picture, we move out of the picture. I don't want to take anything away from others; nor do I want my kids to feel excluded or isolated any more than they already will just by virtue of the fact they are different. If Santa shows up, my kids stay home.
For what it's worth, Chanukah is not the "Jewish Christmas." Ironically, Chanukah is a holiday that actually celebrates the victory over assimilation and acculturation to a foreign culture. The miracle wasn't just the oil -- it was the preservation of Judaism and the Jewish way of life from a culture that sought to annihilate our religious tradition and identity. It's nice when others teach about Chanukah, but I don't expect or even want it in the public schools -- I feel like it dilutes the real message of the holiday. It's one thing to celebrate that others have different traditions; it's quite another to take pieces of those (dreidel, songs, latkes) and trivialize their significance. That's just my own private rant, though, and not one that would be very popular, I suspect. (And one which, I think, maybe mirrors the objections some Christians have to Santa...those nasty 'fundies' to whom a pp referred).
My kids won't be in public school long; they'll be homeschooled and/or go back to yeshiva when I can figure out a way to make it happen. They belong in a place where they can celebrate their own uniqueness and be immersed in their cultural/religious identity all the time and not always have to be on guard against the isolation that comes with minority status. Maybe that makes me guilty of trying to 'bubble' them but to my way of thinking, it gives them a stronger foundation from which to emerge as their own people when they grow to adulthood and face a lifetime of minority status.