We had a nice chat with a Dream Squad CM last week at Epcot. He said that most of the stuff is given out early in the day. Especially the dream fastpasses as they want to give the people as much time as possible to use them. Similarly, the night in the castle must be given out fairly early. He told us that the winner has two hours to decide and sign all the paperwork. One father and daughter won but they couldn't get ahold of the rest of the family that was off shopping, so the father and daughter got to spend the night in the castle while the rest of the family was out of luck.