http://en.wikipedia.org/wiki/Santa_Claus:
The modern Santa Claus is a composite character made up from the merging of two quite separate figures. The first of these is Saint Nicholas of Myra, a bishop of Byzantine Anatolia (now in modern-day Turkey) famous for his generous gifts to the poor. In Europe he is still portrayed as a bearded bishop in canonical robes. The second character is Father Christmas, which remains the British name for Santa Claus. Father Christmas dates back at least as far as the 17th century in Britain, and pictures of him survive from that era, portraying him as a well-nourished bearded man dressed in a long, green, fur-lined robe. He typified the spirit of good cheer at Christmas, and was reflected in the 'Spirit of Christmas Present' in Charles Dickens' famous story, A Christmas Carol.
When the Dutch still owned the land that later became New York, they brought the Saint Nicholas' eve legend with them to the Americas, but without the red mantle and other symbols. Note that in Dutch, the feast is called 'sinterklaas feest' and it celebrates the birthday of sinterklaas during sinterklaasavond ("sinterklaas's evening" ) on December 5th or in Belgium on December 6th.
Sinterklaas was Americanized to "Santa Claus" but lost his bishop's apparel, and was at first pictured as a thick bellied Dutch sailor with a pipe in a green winter coat. Santa Claus appeared in various colored costumes as he gradually became amalgamated with the figure of Father Christmas, but red soon became popular after he appeared wearing such on an 1885 Christmas card. His horse was converted to reindeer and a sleigh, the black peters (which were in fact Moorish slaves) were converted to elves, and, in an attempt to move the origin of the festivities away from their pagan background to a more Christian one, the date was moved forward a few weeks to the celebrated day of the birth of Jesus: Christmas.
Santa's image was further modernized by the Coca-Cola company, which at the turn of the 20th century featured the character in a variety of advertising campaigns. The final version was designed in 1931 by the American artist Haddon Sundblom, who used the Swedish Tomte as a model for Santa. These campaigns helped establish a "uniform" Santa character, whereas prior to this his appearance and costume had varied from artist to artist.