Hi J.,
Here's what I did for my kids:
I found some darling little boxes that had a sculpture of a fairy on top (I got one with a boy fairy for my son and a girl fairy for my daughter). When the first tooth came out, the tooth fairy (me) left the box with a Sacagawea dollar coin inside, and a letter underneath of it. Since I have terrible handwriting, I wrote the letter in a spidery font on the computer, printed it out onto colored paper, and cut out the message into the shape of a fairy (kind of a person shape surrounded by huge butterfly wings). This first letter welcomed the child into the new world of growing up, and instructed them to leave each newly lost tooth in the fairy box (this made it a LOT easier for me to sneak in and grab the tooth, rather than having to snake it out from under the pillow without waking up an already excited child!).
The fairy then left letters and a single dollar coin for each tooth. Sometimes I wrote the letter in verse, other times in prose. The letter was always personalized and centered around something significant going on in each child's life at the time. The really fun part came in when every once in a while, the fairy would mess up and forget to claim a tooth (or, in the case of my skeptical dd, I was not informed that a tooth had been lost so that she could test if the fairy really existed LOL!). On those occasions, I spun a wild tale about a fairy's union, too many pickups to do in one night, a labor strike, whatever, and then left extra money for compensation and "interest."
My kids loved this system. It really sparked their imaginations, and eventually they started writing letters back to the tooth fairy! The only problem we ran into was when they started asking why other kids didn't get letters, too. The funniest thing that ever happened was when we could no longer get Sacagawea coins and switched to Susan B. Anthony coins. My daughter looked at the face on the coin and asked if it was a picture of the tooth fairy. When I said that I guessed it was, her response was, "Boy, she sure is ugly, isn't she mom?!"
I've saved every one of the letters over the years. One of these days, I'm going to try to write a book around them. Have fun! This is a very special time in your daughter's life.
R.