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Finally watched this again, via the DVD.  Not great quality, but better than the old VHS I had.

Santa Claus lives in a magical castle that orbits above the North Pole.  There are two other castles floating nearby, but we are never told whose domains they are.  Maybe the Easter Bunny and Father New Year?  Anyway, from his vantage point, Santa uses a variety of spying devices to keep tabs on children.  The magical pair of lips on one machine were disturbing.

Also inhabiting Santa's castle are children drawn from every nation.  Well, they do not get to live in the big, comfy castle, instead they are forced to work in the courtyard with snow falling on them as they build toys and sing.  Now and then, Santa comes out to tell them that Christmas depends on them.  From a conversation with one child, I get the idea that Santa took them from Earth when they were very young and the children have not ever seen their places of birth.  Which makes it a little weird they would speak different languages and wear clothes appropriate for their country of origin.

Also, the inside of Santa's castle has a middle eastern feel, which wide archways and open rooms.

Santa's antagonist is a devil named Pitch.  Pitch has huge ears and is sent to Earth to ruin Christmas, along with performing interpretive devil dances.  He spends most of his time trying to convince children to do bad things, like throw rocks through windows at hideous mechanical Santa constructs that laugh at all the children pressed against the store windows.  He is only successful with three kids and devotes a huge amount of effort to giving one little girl (maybe 4 years old) mental health issues.

To help him with the magic needed to put children to sleep and turn invisible, Santa relies on Merlin the Magician.

Finally, Santa rides to Earth on his sleigh, pulled along by four mechanical reindeer.  Pitch, still bent on stopping Christmas, tries everything from moving the chimney on one house to letting loose a vicious dog on Saint Nick.  Prior to letting the dog out, Pitch cuts Santa's bag of tricks, causing the magic dust (for sleep) and flower (smell to turn invisible) to fall out.  Santa is up a tree, looking down at an angry dog.  He calls for help from Merlin.  Will someone hear Santa's call for help and tell Merlin?

Santa does get a few licks in on Pitch.  At one point, Pitch is inside a house, blowing on the doorknob to make it hot.  Santa enters via a window and sneaks up behind the devil.  He primes and fires a toy cannon that hits the evil imp in the butt with an arrow-like projectile, causing obvious pain.  Wait a minute, he was going to give that toy cannon to a child?  I hope Santa has liability insurance.

Made in Mexico, no?
 This one belongs on the '''bad dubbing" thread, or at least the one they showed every year like clockwork at the old Fairfax Theatre --
The moment we waited for all movie long was the moment you describe, wherein Pitch gets it in the butt -- hard! 
We'd all scream and shreik with laughter over that one -- Not even the 3 Stooges could compare --
Otherwise, a great excuse to run up and down the aisles and throw stuff at each other.
peter johnson/denny crane

You have to wonder why Santa was not carrying a bag full of magic snowballs to throw at the evil devil.  Actually, what would have been great is if Santa had drawn a massive broadsword and cut Pitch in half, instead of shooting him with the cannon.

I believe I was taken to see this as a boy, by my grandmother, I have never been a big fan of this type of Santa movie, so my reaction was, you're joking, right? Don't remember much about the movie, I do remember that grandmother never took me to another movie so I may have angered her with my obvious and vocal dislike of this film. The use of a broadsword on Pitch would have improved the movie 100%. Now Santa with a broadsword is a good idea, you tell the kiddies be good and this guy (show picture Edmund Gwenn as Santa) will bring you presents, you then tell them if you're bad this guy (show picture of Jack Nicholson, axe in hand saying "HERE'S JOHNNY" as he comes through the door in The Shining) will take your head.

That particular image could only be made better if old St. Nick indulged in some wild martial arts moves with said oversized piece of cutlery, whipping it around in circles behind his back and over his head before reducing Pitch to finely-sliced lunch meat.

This was one creepy movie.
This was the happiest, laughingest Santa I've ever seen, yet he didn't drink or smoke, so he didn't really have an excuse (not to mention, no place to stick the obligatory "What's in that pipe?" joke). I mean, even as a child, I found the joy of arranging the Nativity set to be, at best, interesting, but Santa seems to find it hilarious. Makes me wonder how he's really arranging the figures.

And whose idea was it to make the KeyMaker a castrato? And why was he red?

And why would Pitch point at the newspaper when it was already on fire?

And that "Cocktail of Remembrance".
Ooookay, so you're in a nightclub somewhere in Mexico after midnight, when you're approached by a rather portly looking waiter who happens to have long hair & a beard, whom you don't know, but you seem to recognize from somewhere, who brings you a drink that you didn't order, which happens to be yellow, with smoke coming out of it, and he tells you that it's "a magic cocktail, that only he can prepair". Eh, sure, why not!

I was, however, impressed with that scene in which Billy feels he's ready for "that" conversation, only to have Santa slyly avoid a potential Micheal Jackson scenario.

And of course, a couple of things I learned from this movie:
1) Why most of my old friends started getting kinda grouchy after having kids
2) Hell is really a ballet academy for kids with "special needs"
3) It's not the pipe, the eggnog, or the magic cookies, Santa's just "that way"
4) "Dante" is pronounced "Danny"

One of the Lessons Learned from this movie was:

Hephaestus works for Santa Claus now.

Gee, and I thought it was supposed to be Vulcan.
I must confess, when I first saw this scene, the red body paint made me think it was Satan. Then Santa enters the scene, & I ask myself "What's Satan doing working for Santa?" Then the Magic Key comes out & they get to talking, & I figure it must be Vulcan.

But if the KeyMaker is really Hephaestus instead of Vulcan, I'll concede.

But that still doesn't explain why K. Gordon Murray saw fit to give this guy such a high pitched & effeminate voice.

I always assumed it was Hephaestus, vice Vulcan, as "Nick" is a Greek name.

Oh wow!  This was one of those small miracles.  I was thumbing through dollar dvds at Kmart of all places!!!  I picked up this one, along with...hold onto your britches... BLOODY PIT OF HORROR (poor Mickey...just died!)

I had never been privy to such a masterpiece!  Feliz Navidad El Diablo!!

I've been wanting to see this film for a few years now. It sounds really weird.