If you're asked a direct question, have a direct answer! If you're asked a question that catches you off guard, stall! Knowing the answer to this question also ensures that the Santa you celebrate (if you so choose) is personally suited to your Christmas.
So, who and what is Santa? Well, one simple breakdown can be found on youtube, via the incomparable, CGP Grey. If you're not already a devotee, Grey makes efficient and thoroughly watchable brief histories, how-tos, and explanations of everything from continental drift to Santa (and, in this case, how Santa drifted across continents).
The problem with Grey's explanation is brevity. To keep it short, the video focuses on a few select, though strong, influences and makes no mention of, for example, the Christian St. Nicholas. Do a little research on your own and Grey's version either crumbles or is made rock solid, depending on what else you read. There's more approximation than scholarship out there when it comes to Santa.
Personally, the message I take from the Christian St. Nicholas (absent from the video above) is the one I hope to most closely embody in spirit and action during the holiday. The story of St. Nicholas is contained in The Santa Talk Podcast, Episode #2 - Chapter One where I give a slightly different, somewhat contradictory take on Santa's origins.
Nutshell: St. Nicholas anonymously donated the dowries for three daughters of a pious laborer in fourth-century Greece. Without said dowries, these women would have been destined to lives of prostitution or servitude.
The what: on the eve of each daughter's twelfth/thirteenth birthday, under cover of darkness, St. Nicholas delivered sacks of gold to the man's cottage, entering through an open window. On the eve of his youngest daughter's twelfth or thirteenth, the laborer locked the house and hid in the shadows to see who was throwing gold at his house. Depending on what account you find, St. Nicholas either a) climbed onto the roof and dropped the gold down the chimney or b) deposited the gold in a stocking hung out to dry.
In any case, when confronted by the laborer as to why he had committed this act of unimaginable kindness, St. Nicholas responded that he had done nothing -- that God had inspired him to be of service. So inspired, St. Nicholas reasoned, any person would have done the same.
Knowing your Santa will help you determine what aspects of the holiday your figurehead stands for and reminds you of. For me, anonymous charity is where it's at. Have you ever done something kind for someone that you never told anybody about? I have.