Several points to make...
We love doing the Fantasmic package...you show up 1/2 before the show at a special entrance that's quite a long ways away from the regular entrance: no line at all. You will not always get "4:00"...we had 5:05 in May, and in September we have 4:40. I was told the latest they do Fantasmic packages depends on the restaurant (and the average time it takes to eat there) so some places reserve as late as 6:00 for Fantasmic.
They reserve about the right 1/3 of the theater, top to bottom, for the dinner package guests (part of the top 2 rows are reserved for all handicapped guests, though.) The view is good from all the seats in the place (they actually duplicate some of the stuff in the show so both sides have a straight-on view of special effects.) About 10 minutes before the show they allow others to fill in the unused reserved seating, but even in the off times of year, the place will be crammed standing-room only by show time. We think the package is well-worth it, especially if you don't want to stand in line & don't want to wait. (in May 2007, I didn't get the dinner package, we were there during a supposed Lighter crowd time...line had hundreds waiting 90 minutes before the show. We skipped it.)
Fantasmic Package does NOT cost extra...you basically pay the same for the meal whether or not you had the package. The difference when you book the package is that you have to give them a credit card guarantee on the reservation, and they will charge a $10 per person fee for a no-show (but if you call & cancel in advance they don't charge this fee.) We liked Hollywood & Vine (nice buffet.)
On nights when they do 2 shows, the 2nd show is much easier to get a walk-in seat...many families, especially with younger kids, will do the earlier show & then leave the park. However, during slower times of year, they don't do 2 shows a night very often. Fantasmic packages are always for the 1st show if there are 2 shows.