for invitations, you could roll them up like a medieval scroll.
one station could be balloon animals like in the movie when the blew up the frog and snake like balloons
you could set up an obstacle course to go through to rescue the princess (or maybe their goodie bags)
you could have a face painting station, maybe paint them up like ogres
for food of course have gingerbread men, i believe family circle has directions for a castle cake
For music, use the sound track from the movie
For decorations use royal colors like deep greens and purples for table cloths
Plastic swords from oriental trading company could be a good party favor. These could be used to slay the dragon
If you can find a dragon shaped pinata