Hi A.,
We used the ole Binky Fairy, too. First we worked up to it by talking about it. We said, "You know, once children get a certain age, they don't need their binkies anymore. So when the time is right, the binky fairy will give your pacifiers to a brand new little baby who really, really needs the binkies because they are so little."
Our daughter was so attached (she literally had that thing in her mouth from morning through the night), we really did it up. We wrote a beautiful letter from the fairy, decorated it, and it arrived in our mail box. We made a big to do about it. The letter had a specific date (a couple of days later) and told us how to do it. We wrapped up all the pacifiers in a box, ceremoniously put it in the mailbox to mail to the fairy.
Two days later, a thank you letter arrived from the fairy, with a picture of the brand new baby that received it, with some information about her (my co-worker had just had a baby, worked out perfectly!). All of this really helped my daughter make it final.
BTW, we did all this at 2 years old. Now 3.5 years old, she still has that picture of the baby and we talk about her and how she must be doing great w/ those binkies. Just to let you know, we thought we'd have about two weeks of difficulties getting over this -- especially at night time. Not at all. Our daughter handled it like a champ and got over it very quickly. You'll be surprised!!