Ah, Helga -- Lizzie and Mona were very fond of her. Your mother probably gave it to us. It's out of print, alas, but at libraries and Alibris, which we haven't discussed much but which is a great source for the books you remember from childhood.
I know that the princess fascination isn't new, but it does seem to have gotten more intense lately -- thanks in no small part to the Disney marketing machine. I offer here a wonderful column written by Marjorie Williams on the occasion of the death of Diana in 1997. "It is the rare little girl who wants to grow up to be queen," she writes. "To wish to be a princess is not simply to aspire upward, to royalty; it is also to aspire to perpetual daughter-hood, to permanent shelter."
A few additions to the princess book list. Cornelia Funke has two lovely strong-girl picture books. The Princess Knight is about a princess who trains with her brothers to be a knight, only to end up with her father inviting male knights to a tournament to compete for her hand. She is outraged: "You want me to marry some dimwit in a tin suit?" She sneaks into the tournament as an anonymous entrant, and gets what she wants. It's good, although feels like it's trying a bit too hard.
Another Funke which I like better is Pirate Girl, about a girl who is captured by pirates and keeps warning them that they'll be in trouble when her mother comes to get her. They all think this is ridiculous, until mom shows up as the captain of her own pirate ship, striking terror into the hearts of the bad guys. The illustrations are what make this so good: the pirate queen is a hefty Teutonic-looking redhead, clearly tickled to have her little girl back.
Both those Funke books, plus a very different but lovely one about a little brother, have been packaged together in one book, A Princess, a Pirate, and One Wild Brother, three hardcover books for the price of one.
Then there are the chapter books... Another time.