ETA: There is now a third thread, so send new comments there.
Since the first thread has exceeded 500 comments, it seems time for a new one, with Eliezer's just-posted Chapter 33 & 34 to kick things off.
From previous post:
Spoiler Warning: this thread contains unrot13'd spoilers for Harry Potter and the Methods of Rationality up to the current chapter and for the original Harry Potter series. Please continue to use rot13 for spoilers to other works of fiction, or if you have insider knowledge of future chapters of Harry Potter and the Methods of Rationality.
A suggestion: mention at the top of your comment which chapter you're commenting on, or what chapter you're up to, so that people can understand the context of your comment even after more chapters have been posted. This can also help people avoid reading spoilers for a new chapter before they realize that there is a new chapter.
You do realize that one of the things that this kind of thing teaches is "Dad's willing to slash my tires", I hope. Sufficiently smart kids can pick up on that kind of issue surprisingly young - my own relationship with my mother never really recovered from the instance when, at age 5, I discovered that she was willing to lie to me for her own convenience, and what you're proposing to do appears to be rather similar in scope and potentially more damaging because it's intentional rather than incidental.
Parenting is preparing kids for a dangerous world, and part of that is exposing them to moderate risks with limited real penalties. In the real world, there are people who do magic tricks, themselves believe the magic is real, and want your money.
My aim would be to keep it light and entertaining, so as to create a positive halo of solstice magic, and so that the positive memory doesn't go away with the knowledge that it was sleight of hand. In fact if I do my job as a rationalist parent, the holiday association is: entertainment+presents+learning+food