When is it "OK" to lie to your children?

When you have an issue that comes up in life - like a family pet needing to be "put down" or euthanized - should you make up a story to tell your children?  Or should they learn that part of being a responsible pet owner is putting said pet out of their misery?

I ask this because a dear friend recently had to make that decision, and while I don't know that I would have chosen the option she did - I absolutely respect what she decided was best for her family.

Have any of you ever had to deal with a situation like this?  It's complicated and personal, but I wonder if it is ever "OK" to lie to your kids?  What do you think?

On another topic completely - I've written 8000 words so far for my NaNoWriMo novel.  I'm really excited about where my story is going and hope I can find someone who will read it and critique it for me!  Let me know if you'd be willing to do a novel swap! :)