You can meet the fairies in Toon Town, the line runs parallel to the princess line so you can see how fast the other line is moving. You are taken by groups into a room where you meet 3 fairies or princesses, depending on which line you're in. The place you meet the fairies is called "Pixie Hollow".
Toystorymaniacs: I met Tink last week. We were told that Pixie Hollow opened at 10, but that people started lining up way in advance. We figured there was no point in waiting in advance when we could just come back later & wait anyways. We went around noon and waited 75 minutes, even though the side said 45 minutes. It was a blast - we actually got to spend a lot of time w/the fairies, and they were really fun. I highly recommend doing it, but going earlier than I went just to cut down the line. You're there at a pretty laid back time if year so it shouldn't be bad.