A charming and rather surprising novel by Thomas Mann, Royal Highness. This was delightful: set in a comic operetta sort of principality in late 19th century Germany, it's a fairytale-ish sort of plot about the regeneration of the declining society when the Prince falls in love with a modern, liberated American heiress. Being by Thomas Mann, of course, it's full of gentle irony and reflection about the islated nature of royalty, but is nonetheless delightful. 
At the other end of the fairytale spectrum, Angela Carter's The bloody chamber was also fun: modern feminist retellings of fairy tales (without all the worthy seventies feminism that implies - awful memories of leaden retelling where all the princes are wusses and the princesses ride motorbikes). These were sexy and stylish and fun. I was particularly pleased by the sheer catness of the cat narrator of Puss in Boots.