I can't believe I found it!
I have recently remembered that there was this movie I watched when I was five or something that was like Snow White, but one I liked a lot more than the Disney version, and had these cute little characters in it... it took a while, but I found it! Hopefully I can watch it again. I remember a lot more looking at the cover, and I remember that cute little hodded guy was my favorite and he became a good guy in the end, right? =P
Anyway, this is such a fun movie, and after all these years I still remember it!