Fantasmic is in the Hollywood theater at MGM and is technically a show but it is unlike anything you have ever seen. It combines characters, live action, laser lights, water screens and music into a huge production that tells the story of Mickey's dreams. It is a must see!
Seating opens up before the show and is basically stadium seating, first come first serve. It does get crowded and you should arrive at least 30 minutes before show time. If it is an busy day ask the cast members at the entrace if you should arrive earlier. You can get some food in the theater but a better bet is to get dinner/snack outside at one of the vendors and bring it in to eat while you wait for the show to start.
If there are two shows that night the second is usually less crowded.
You can get a Fantasmic dinner package that includes dinner in the park and a special seating area of the theater but it is expensive and the seats aren't any better then you would get on your own. I've never tried it so I don't have any pros or cons about it.