Halloween can be traced back to the ancient Celts. One of their two main feasts was Samhain, at the end of Summer, where spirits of the dead and other "creatures" would enter our world from the realms of the dead. The only thing the people coud do to protect themselves was to masquerade as one of the dead and hopefully not be noticed by them. Pumpkins (originaly turnips or beets) were cut with faces representing demons to frighten away evil spirits.
In the 7th century, Pope Boniface IV introduced All Saints' Day to replace the pagan festival of the dead. For Christians, this was the day to remember all the saints who had died. In 834, Gregory III moved All Saint's Day to November 1st. October 31 thus became All Hallows' Eve ('hallow' means 'saint'). In 1517, Martin Luther honored the faithful saints of the past by choosing All Saints Day as the day to publicly charge the Church heirarchy with abandoning biblical faith. This became known as Reformation Day.
I do not think that participating in haloween as it is today has any more ties to the ancient pagan beliefs or occult than it does to honoring the saints in Christ that have passed before us. It is no closer to the ancient pagan festival than some fat dude in a red suit eating stale cookies and warm milk, a red-nosed flying reindeer and a bunch of snowed in elves is to Christiaity. I have no problem letting my kids don an outfit and get candy from our family and friends. I do prefer them not to dress up as demons or witches, however. These are things that are real and cannot be "secularized" out of reality.
I think the best guideline paralell is when Paul speaks about eating food sacrificed to idos in 1 Corinthians 8:4-13:
Therefore concerning the eating of things offered to idols, we know that an idol is nothing in the world, and that there is no other God but one. For even if there are so-called gods, whether in heaven or on earth (as there are many gods and many lords), yet for us there is one God, the Father, of whom are all things, and we for Him; and one Lord Jesus Christ, through whom are all things, and through whom we live.
However, there is not in everyone that knowledge; for some, with consciousness of the idol, until now eat it as a thing offered to an idol; and their conscience, being weak, is defiled. But food does not commend us to God; for neither if we eat are we the better, nor if we do not eat are we the worse.
But beware lest somehow this liberty of yours become a stumbling block to those who are weak. For if anyone sees you who have knowledge eating in an idol's temple, will not the conscience of him who is weak be emboldened to eat those things offered to idols? And because of your knowledge shall the weak brother perish, for whom Christ died? But when you thus sin against the brethren, and wound their weak conscience, you sin against Christ. Therefore, if food makes my brother stumble, I will never again eat meat, lest I make my brother stumble.
