For centuries, all over Europe, little children received gifts from an old man on a white horse in celebration of St. Nicholas Day.  But with the dawn of the Reformation of the sixteenth century, it became unpopular to celebrate any saints or their feast days.  The custom of gift giving was firmly established by then, though, so its significance was transferred to the birth of Christ and St. Nick had a name change in many countries.  England had Father Christmas, France, Pere Noel, and most of Germany had Weihnactsmann (Christmas Man), while Northern Germany had a whole cast of characters designated to reward the good and punish the bad.
 
The Dutch, both Protestant and Catholic, however, continued to be visited by Saint Nicholas and brought him with them to New Amsterdam.  By then, his name had been shortened to "Sinte Claes", which was eventually Americanized to Santa Claus.
 
The legend of our modern Santa Claus is a conglomeration from three separate sources.  Washington Irving gave him the gift of flight and a horse and wagon in his book, Diedrich Knickerbocker's A History of New York from the Beginning of the World to the End of the Dutch Dynasty.  The poem by Clement Moore, An Account of a Visit from St. Nicholas, published in the Troy Sentinel on December 23, 1823, gave him a sleigh with reindeer and the ability to shimmy down chimneys.  The appearance of Santa is largely credited to the Harper's Weekly drawings by Thomas Nast in the late 1800s.  It is said that Nast used his own face for the image of the roly-poly elf- like man we know today as Santa Claus.