Ooh - I can tell you all about this....
The place on Main St, is in back of the confectionary. You can enter thorugh the candy shop, but there is also an outside entrance.
If you buy your Mickeys ears there - you can have them personalized for free, provided you are willing to wait in the line. The stitching there ONLY comes in white, only in one basic style of script font, and it is done with a special sewing machine. The workers there are quiet skilled, and it is rather impressive to see them do their thing. They do sell a variety of hat styles there, and the price is not bad.
The other option, as far as I know, is the back of the Christmas shop at DTD. Walk through the shop and the engraving/embroidering part is in the back. There is also a side entrance, but it tis kind of out of the way. At this location there is a charge (I think around five dollars) and it is done with a programmed machine. Depending on when you go - you buy your hat, sign up for a time, pay for your hat (or other item), and come back when it is ready. There are a variety of colors and fonts to choose from. The font styles are thicker (i.e. more thread used) They will also personalize almost any fabric merchandise - shirts, other kinds of hats, towels, etc. On larger items like shirts, they can even make character faces (though these would not fit on Mickey ears). It is much harder to watch them in action at this location, unless your scheduled time is close to when you drop off the item...for us, it was completed before the sceduled time, so we did not get to watch.
There is another place at DTD that does personalized T-shirts, and maybe a few other things. They do airbrushing (and I think iron-transfers).