You'll "hear" some differing opinions about this activity, but we've enjoyed it. It is not a big splashy event, but we've found it to be a cute diversion.
It takes place on sea days, typically Monday or Thursday on the Western itinerary. I think it is popular, but not a problem to get into. You can get tickets in advance, watch the navigator for information on that, or you can generally walk right in at the time of the event.
It takes place in Studio Sea. Wendy Darling hosts and teaches everyone how to have a proper tea. The tables are set with individual tea post and cookies. Instead of hot tea, they acuatlly serve iced tea. I assume this is for both the safety of small kids and it would be hard to get all of those pots filled and kept hot. Wendy picks two boys from the audience to subsitute for her brothers. She teaches everyone about manners and a proper tea, then tells the story of her adventures with Peter Pan. Afterward she is availble for autographs and photos.
We have done this twice, once with just our boys and the second time with our youngest boy and our God-daughters whose family was with us in September. And you would think that this is mostly a girl type thing, but my youngest son enjoyed it the first time, and since then holds his little finger out when drinking from a tea cup. This last time he was picked to be one of Wendy's brohters.
It lasts about 30 minutes. And again, not a big production, but a uniquely Disney thing to do in the afternoon.