That whole affair with Sleeping Beauty could have been prevented. All the king and queen had to do was make sure they invited all the fairies to the poor kid's baptism. Hurt feelings aren't any fun, and a wedding is very public declaration about who is and isn't important in our lives. There will always be people you don't want to invite, but should to keep the peace. Just as importantly, there are people whose absence will make your day run more smoothly. Of course, both decisions will have long and short term implications. I have few ideas about making your invitation process a little easier.
Drafting your guest list should not be done all at once. Start by listing all of your family and friends, which if you're anything like me, will require carrying paper at all times because your mind suddenly became Swiss cheese. List out all those great aunts and third cousins. Start researching addresses (sometimes this can take an absurd amount of time). Write down all those friends from high school, bar buddies from college, and people you've worked with. Don't forget spouses and children (which isn't necessary if you aren't welcoming little ones). Are you close to your neighbors or past neighbors (like the ones you grew up next to)? Write them down. Now your list should be very, very long. Don't Panic!
Start coding your list into categories: People you want to attend, People you HAVE to invite, People you should invite, and people who should receive a wedding announcement. Make special note of any people on any list who may be problematic. Run the list past the major family members (like the parents) to make sure no one was missed. Decide what your maximum number of guests will be and prioritize invitations based on whatever criteria is most important to you (this will likely be a group effort, prepare yourself). When you've whittled your list down to who will receive invites, make copies and give them to responsible people for safe keeping, this way, when you lose one copy, you don't have to go back to square one. Start compiling addresses, even for people you don't invite, as you may need it later to send an announcement or a thank you. Send out "Save the Date" cards, letters, or e-mails to people who will have to travel long distances, will require major scheduling to attend or who you really, really want to be able to come months in advance (If you have a date picked out and a contract signed for your venue- up to a year in advance is fine). Invitations should, generally, go out 6 weeks before your event. Announcements within a month after the event (though, it is nice to get help addressing those when you get the invites done).
As you complete your guest list, remember that it is very difficult to make everyone happy. This is life. No matter what you decide to do, there will be people who don't like it. For some reason weddings and babies break down the normal filters that caution people to keep their advice to themselves for politeness' sake. Think of wedding planning as your fist lesson in being a spouse, which will mean that you develop a duck's back against commentary, smile and say "Thanks!" when you don't want to, and find yourself wondering why you didn't elope. Just remember to be polite, and leave the bad fairy off the guest list at your own peril.