Guests are seated continuously throughout the dining period at each meal. For example, guests are seated at the Crystal Palace at the Magic Kingdom from 8:00 a.m. until 10:30 a.m. Reservation times are given in five minute intervals. When you call, you'll say something like, "I have a party of four. I'd like to have breakfast at the Crystal Palace on August 22, as early as possible." The reservationist will type at the computer for a few seconds and will come back with something like, "We have availability at 8:10 or 8:25." And then you'll have an opportunity to choose which option works best for you.
The only real exception to this is Cinderella's Royal Table. For a reservation, just immediately take whatever the reservation offers you and be happy that you got in. For more about this, read
HERE.
Many of the character meals do have some small entertainment during meal time. Usually the entertainment only lasts three or four minutes. At the Crystal Palace, for example, there is a small "parade" through the dining room in which all the children are invited to follow the characters in a lap around the room. This takes place while the meal is going on and guests continue to be seated. The parade is repeated approximately every half hour so that every guest will have an opportunity to participate.