I would say that the "wait in line for 2 hours" is kind of an 'urban myth'. No one actually stands in a line waiting that long (or if they do, they don't have to). And, as dclfun mentioned, there is no separate wheelchair entrance. My youngest DD has a lot of issues that impact on her ability to wait and we have never found waiting for Fantasmic to be a problem. We have also been there with my nephew who has ADD and a 3 yr old (not known to be the most patient creatures on earth).
We just got back from WDW and didn't realize when we made our plans that the weekend right before Columbus day was a very busy time. We have also been at WDW many times over Spring break/Easter week, which is one of the busiest times. We have been to Fantasmic many times and have never stood in line for it at all.
For the 8pm show (some nights there are 2 shows and the 8pm is the earlier show), some people
might get in line 2 hours before the show, but most don't go into the line until the CMs start letting people into the amphitheater. That begins about 1 hour before the show for the 8pm show. Once they start letting people in, your whole 'wait in line' is spent walking into the theater. The CMs direct you to seats and you spend the rest of the time sitting on the bench seats waiting for the show to begin. There is Disney music playing over speakers above your head and the crowd does things like the 'wave' or we've sometimes seen CMs sending beach balls bouncing across from one side of the theater to the other (as it gets close to people, they give it a light hit to send it along). Some kids are sitting there reading, coloring or playing Game Boy. There are snack bars inside the theater that sell popcorn, hot dogs and pop. There are usually also CMs walking thru the crowds selling popcorn, cotton candy and light up toys. If you don't think your child can stay in the seat the whole time, once you have seats, you can have someone in your party stay to save them while someone else goes with your child to the back/side of the theater area. There are restrooms there and it's a quieter, out of the crowd place to stay.
We usually don't join the line at all until we can see that the line has started moving into the theater area. Doing that, our walk in is usually about 10 minutes or less from the time we enter the line until we have been directed to seats. Because our youngest DD uses a wheelchair, she is in the back row; the 2 rows right ahead of that are reserved for people who are traveling with the wheelchair parties or people with GACs that allow them to sit there.
A CM had told us once that the amphitheater can hold 10,000 people. I think that was in the days when they had more standing room only crowds; I don't think it probably holds 10,000 seated, but it does hold a lot of people.
Another alternative if you don't want to wait is the
Fantasmic Dinner Package, where you eat at specific WDW restaurants and then get seating in a specific area of the amphitheater through a different entrance (you enter about 1/2 hour before the show).
If there are 2 shows, the guests for the second show have to wait in line during the time it takes the guests from the first show to leave the area. We have never gone to the 2nd show, so I don't know exactly how long the wait is for the second show. The CMs are quite efficient at getting people in and out.
