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Are they both correct?  Which one is "more" correct?
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“Άγιος Βασίλης” and “Αϊ-Βασίλης” are both correct.

“Άγιος Βασίλης” is more formal.  “Αϊ-Βασίλης” is a form that we encounter most often in Christmas songs and tales for children.

“Άγιος” is an adjective and it is always conjugated when it is used:
ο Άγιος Βασίλης (Nominative)
του Άγιου Βασίλη (Genitive)
τον Άγιο Βασίλη (Accusative)

“Αϊ” is not conjugated, it doesn't take an intonation mark and connects with a dash with the following word.  In grammar it is called “προτακτικό”.
ο Αϊ-Βασίλης (Nominative)
του Αϊ-Βασίλη (Genitive)
τον Αϊ-Βασίλη (Accusative)
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