Before being co-opted by Uncle Walt (and, for that matter, the Brothers Grimm), the medieval, European fairy tales were a women's medium, an oral tradition shared over long hours of repetitive work, such as spinning (that's where "spinsters" comes from...). The tales were the entertainment of their day: the movies, the TV, even the porn (did you really think that Rapunzel and the Prince just talked in that tower?). The Grimms recorded the tales of their time and place, but as their compendium went through a variety of reprints--and as the stories became aimed at children--the brothers took out the sex (especially the pervasiveness of incest as the motivation for a heroine's flight) and amped up the violence. They figured, like many of the day, that scaring the beejezus out of kids would get them to behave. Personally, I love fairy tales and there are those (such as Bruno Bettelheim) who insist that you should read them, gore and all, to even the smallest children. That makes this modern mommy queasy, but I do think they're great for older girls and I still love reading them as an adult. The Disney animators' brushes have painted the heroines as passive and the prince as the savior, but in fact, that's not how many of the story goes. There are some great tales of female feistiness, cleverness and heroics. Most are waaaaay to bloody for girls (some that aren't are on my resources page). But for those of you over, say, twelve, I'd suggest starting with the following, which you can find online, along with many others, at SurLaLune Fairy Tales:
Fairy and folk tales of female bravery can be found in every culture. Also check out Alison Lurie's book, Clever Gretchen and Other Forgotten Fairy Tales, some of which can be shared (or altered to share) with little girls.
My favorite physical version of the Grimms' stories is Maria Tatar's The Annotated Brothers Grimm. You can't beat it. Great on discussing women's roles as well. I'd also suggest Jane Yolen's Not One Damsel in Distress, The Serpent Slayer, and Lady of Ten Thousand Names. Each has some stories within that are appropriate for little ones.
Start with those, then just keep on going! Enjoy!