Spend the indicated number of French Flies at the bonus menu to unlock the corresponding item:

Enchanted Forest level: 40 French Flies
Fiona's Bedroom level: 40 French Flies
Gepetto's Workshop level: 40 French Flies
Play as Human Fiona: 50 French Flies
Play as Li'l Witch: 300 French Flies
Play as Pinocchio: 50 French Flies
Play as Ugly Stepsister: 50 French Flies
Donkey costumes: 10 French Flies
Fiona costumes: 10 French Flies
Gingy costumes: 10 French Flies
Li'l Witch costumes: 10 French Flies
Ogre Fiona costumes: 10 French Flies
Pinocchio costumes: 10 French Flies
Prince Charming costumes: 10 French Flies
Puss 'N' Boots costumes: 10 French Flies
Shrek costumes: 10 French Flies
Ugly Stepsister costumes: 10 French Flies