A friend at work told me about 'Elf on the Shelf' and I figured I would give it a try.  Had to read the book a number of times to my three year old as he immediately could not understand why he could not touch him but he finally understood and the weeks before Christmas were fun as the Elf magically appeared in different places in the house.  And when we traveled he would appear as well.  Great idea and keeps your child off the naughty list.