No references to the pagan tooth fairy in our house. As a kid I had a difficult time relating to other children when they talked about mythological creatures like the tooth fairy and Santa. At least I had been told there was something called Santa and that he didn't exist; the tooth fairy had never been mentioned at all.
So, of course, never put teeth under the people. As I grew up I got to learn about this fascinating folktale as if reading a new book. A short book, but one that I found fascinating.
I like the idea of letting kids have "magic" in their lives, and maybe myths like the tooth fairy and Santa are a way to do that - but I've also seen some pretty ticked off youngsters when they learn the truth, and it's just sad when older kids still insist Santa exists. I mean, taken to the extreme, we had a friend in High School who still thought you could get pregnant from a toilet seat, for heaven's sake.
So, on the whole, I'd rathe inspire awe and mystery in a child at the sight of a mountain lake rather than having them buy into a myth like the tooth fairy, which really seems more for the parents' benefit than the children's.