Our worst experience with characters in WDW was in 2000, when I went to WDW with my family to meet a group of internet friends. We decided on a dinner with the Villians, because all the other character meals could not accomodate a party of our size. Let me just preface to say that we all came together on the internet because we all were due to have babies in March of 2000. This trip was in Oct. of 2000. Our babies were only 7-8 months old. Some of us had older children. Myself, I had a 2 yo and a 4 yo along with my 8 month old.
Let's just say, that the villians dinner was NOT the best idea we had. Once the Villians came out, the screaming began. That is fine, but there was one villian, Capt. Hook to be exact, my 2 yo DD was so scared, she had her hands over her face, and sitting on my husband's lap, if he had a uterus, she would of climb back in. Capt. Hook kept putting his face in her face, and every time she would pull her hands away from her face to check to see if he had gone, he would be right there. She was TERRIFIED. I asked him to please go entertain a child who WANTS to be entertained.
I was so mad. She would of been fine if he would of left our table alone. My husband said that is what they get paid for. I screamed at him "they get paid to entertain! Not scare the living bejeezes out of a 2yo."
Luckily, it did not traumatize her, our next trip to WDW was 7 months later, and as long as it was NOT a Villian, she went up to the character.
Another complaint I have is with Cinderella. We had breakfast in the castle, and my DD lives and breathes Cinderella. She was 4 at the time. We live in Massachusetts, and while Cindy was signing DD's autograph book, she asked where we were from, when we said Mass, Cindy exclaimed how she has been to Mass. and used to go to a place called Edaville Railroad. Well, we live near Edaville Railroad. So my daughter immediately turned to me in disbelief and said "Cinderella has been to Edaville?" I said, "yeah, I guess she likes train rides" The girl spoke put of character for a brief moment, a mistake I am sure, but they should be more careful when making small talk with the parents. JMO
Other than those two experiences, in all the trips we have taken, the characters are wonderful! I have a great group of pictures of Chip messing with my DD and DS at Chef Mickey's ...everytime he walked past our table, he would take their napkins and put them on top of their heads. They thought this was the funniest thing!
EDITED TO SAY...WHOOPS! I thought the title of the thread said your best (or worst) experience with a character!

sorry!
OK...I have another good story. My DD does not remember her first meeting with Capt. Hook. Last year, my kids were in line to meet him and Smee, while PP and Wendy were behind them. PP and Hook & Smee were throwing insults at each other the whole time we were in line, but when it came time for Smee to sign my son's autograph book, PP grabbed it from his hands and wrote in it Smee is a COD. Well, my son thought that was hysterical! And the best part is, he has it in his book to look at forever!