As one of those parents who do not celebrate Halloween, I believe it should be kept out of the school - just like Christmas and Easter should be kept out of the school.
It is each family's right and privilege to believe and celebrate in whatever way is best for them, and it is NOT the right or privilege of the public school system to allow the children "to be kids at school-regardless of what their parents believe." That approach takes parental respect and rights away from parents, and teaches the children that "anything is okay, as long as it's at school."
It is subtleties like this that help make our children today less respectful of parents and allows the government to gain more and more control over citizens. As our children are taught that the origins of holidays don't really matter and that they can celebrate anyway despite their parents' teaching, they are also taught that what their parents have taught them doesn't matter and that can do whatever the government says despite the rights and privileges granted to them by the Constitution. It is already taking place with the Patriot Act.
Our country and government were established to create freedom for our citizens to believe, worship and celebrate how they wish, and to protect those that believe differently from being proselytized by them. The public school system is a place of academic learning. The separation of church and state provides religious learning in the home, church, or church schools. The public school should be devoid of ANY religion, whether Christian, Pagan, Wiccan, Buddhist or Muslim.
I am a 32-year-old Christian that believes our Wiccan, Buddhist and Muslim citizens have just as much right to NOT be exposed to the Nativity as we have the right not to be exposed to Halloween, Buddha or Mohamed.
Feel free to sound off in the comments - just keep it respectful.