If I want to write a book and reference a Disney Character or Fairy
Tale Character- do I have to seek permission or pay a fee?  For
example, if I were to refer to Sleeping Beauty- i.e.  "You don't have
to be like Sleeping Beauty...don't wait..blah, blah, blah, or, "We can
all learn something from Little Red Riding Hood"...etc. etc. do I have
to contact someone?

Just what I think: Characters from traditional fairy tales certainly
are in the public domain. The fact that Disney once used them does not
make them Disney's property, as far as I can tell. Disney can only
claim rights in characters created by them (such as Mickey Mouse) or
their specific artistic depiction of a traditional character. But of
course someone among my colleagues with better knowledge in this field
would surely be able to provide a definitive, well-supported answer.

Scriptor

Scriptor is exactly right.  Classic fairy tales are all well within
the public domain and you are free to use those public domain elements
and characters.  Where you get into trouble is if you attempt to use
elements that have been appropriated by Disney as their own and to
which they may claim copyright.  For example, while they cannot stop
you from using a character named Snow White or even retelling the
classic story of her and her seven diminutive friends (can you name
all seven?), if you illustrated your book with images that look like
you copied them from the Disney movie, that would likely be copyright
infringement.  You see, Disney (or anyone for that matter) can take
public domain elements and add their own unique layers of creative
expression and create a copyrightable work.  So you can certainly tell
the story of Snow White and even tell how she lives with seven dwarfs
(Happy, Sneezy, Grumpy, Dopey, Bashful, Sleepy and Doc) (as long as
this story IS in the public domain--did it originate with
Disney?--can't remember . . .), but just don't use specific elements
that have that unique Disney stamp of authorship and you should be OK.

yup, scriptor and ipfan pretty much got it right in their comments. 
Fairy tale characters are generally OK, but you can't use Mickey Mouse
without Disney's permission.

The only thing they didn't mention is that many of the characters that
appear in the Disney fairytale movies first appeared in the Brother
Grimm fairy tales... which are, by now, definitely out of copyright
(here's a list, with links to the full texts of the stories:
http://www-2.cs.cmu.edu/~spok/grimmtmp/).  As Ipfan pointed out, you
just have to be aware that Disney changed certain parts of the stories
before making the movies, and you should make sure (before referencing
specific events within a story) that you know what really belongs in
the original story and what Disney added (for example, in the original
version of the story, Sleeping Beauty does not go off and live with
the three fairies in the woods; the dwarves are not named in the
orignal version of Snow White).  The parts Disney changed are property
of Disney and you might get in trouble for referencing those.

Otherwise, good luck with your book!

If you have doubts you should use a Clearance service... They will vet
your book and tell you what you can and can't use.  Don't know where
you are located but I am sure you can search for one near you. 
Usually, you can email them your work and they will go through it all,
for a fee, of course and provide you with a full report.