This is a yearly tradition at our house. This was something that Brett's family did. I had never heard of this, but the kids think its a lot of fun. We write our letters to Santa and then read them out loud so everyone can hear them. Then we put them in the fireplace and light them on fire.
The ashes then go up the chimney, and up to the North Pole.
Once they get there they are reassembled in Santa's Chimney. That is how the letters get to Santa Claus from our house. =)