The phone line still exists and I just read minutes ago that they're on pace to beat last year's 107,000 calls. NORAD takes the calls which fits in with their regular duties of watching the skies. The part I just learned was NORAD started taking the phone calls for Santa updates in the 1950's after there was a typo in a Sears ad which asked children to call their store Santa. The number printed was NORAD's (their predecessor in the 50's) and they've been tracking Santa and providing updates ever since. Still with the Internet days, they get over a 100,000 calls! Edit: original post has NORAD's website listed!
Yeah, after I went to check Santa's progress, I went to Wiki to read up on the history - which I seem to do every year as I forget