When I was younger, presents from Santa were set out in the living room unwrapped but still in box/packaging. In some way it felt more 'real' as presents from grandparents etc came wrapped 
I did the same for one year old DD last year though set up toys and unpacked them so they were easier to play with. I'm now wondering what to do this year, she's only just two so no real idea of what's happening but I think this will be the year I set the tradition.
What does everyone else do? To wrap or not to wrap?