I have done breakfast (once) and lunch (4 times). I definitely prefer lunch. The food is really good.
As for characters, both breakfast and lunch are true character meals. Cinderella is in the lobby, and there are 4 characters upstairs (last summer, I saw Belle (blue dress), Snow White, Aurora, and Mary Poppins). Dinner is technically a character meal, I suppose. Cinderella is in the lobby. But the only characters upstairs are Fairy Godmother, Suzy, and Perla- and they are there to do a show.