Also, be aware that some people have waited 3hours for her..... We saw her during Mickeys Very Merry Christmas Party and it was only a 15min wait! Try and get in line as soon as toontown opens which I think is 10 but I am not positive?!
Pixie Hollow is located inside the Judges Tent in Toontown. A word of advice...get there EARLY in the day....preferably RD for Toontown. The line gets long quickly. It is a wonderful experience and the fairies are an amazing character experience so it's definitely worth it!
The reason the crowds are/were so high is because it just opened in October - it's also the only place to see Tinkerbelle - so people like me who won't wait more than 5 minutes for a character normally, will be willing to wait a little bit longer (though not 3 hours). I think the crowds have died down a bit since the 3 hour reports.