How’d this business with the tooth fairy get started?
This site:
http://nene.essortment.com/teethfairiesst_risz.htm
implies that it has Viking origins. To quote:
Even more interesting is the fact that Vikings had a “tooth fee,” or a fee that was given to children upon the use of a tooth. The teeth were later strung to make jewelry, some researchers claim. This old legend is surrounded in mystery. Alongside it is the superstition in early Viking days that children’s articles and pieces contained great power. Having an article of a child, or a child in your possession was supposed to bring power and luck in battle.
The site also mentions that in the middle ages when a child lost a tooth it was burned to prevent demonic posession. (!) They think the origin is a combination of these.