Truth be told almost all of our holidays have a pagan undertone (Easter = Ishtar, Christmas = Winter Solstice, etc.), but is this why we celebrate today? No. Are we even really aware of these things when we celebrate? No. As far as I am aware, at no time when I am decorating Easter eggs with my kids am I thinking about a fertility god in any form or fashion. Likewise, when I am going door to door with my kids collecting candy am I thinking about paganism or the devil? No. Instead, I am simply enjoying the American aspect of family, treats, and the fall weather while getting my kids dressed up as superheroes.
Romans 14 and I Cor 8 are the key texts for Christian's living in a fallen world. Knowing that I am doing nothing to glorify the devil in my celebration of fall costumes and candy giving, my conscience is clear for me to celebrate the American holiday of Halloween. HOWEVER, I know this is not the case for all of my brethren. If someone is against participation, then that is THEIR decision and I respect it without hesitation.
The problem for me comes when the zealous in our ranks feel it their obligation to presuppose my motives or level of understanding when it comes to these sort of issues. I think it is entirely wrong for Christians to tell me and others like me that we are honoring the devil by collecting candy and spending time with our family and neighbors. This is especially annoying when we (as a family and church) use the day to witness with such ministries as "Light the Night."
As far as costumes, we make sure our kids are wearing God-honoring outfits. No evil or gore allowed. We also make sure that we teach our kids about the dark side of the holiday and remind them that we have NO PART in that aspect. It's been good and beneficial for our family to take this approach and has also led to many conversations with our community about who Jesus, God and the devil really are.