How do you unlock toon Zelda?

Toon Zelda isn't a character, unless you are talking about toon link. (a more common mistake than most people believe)

Toon Link can be unlocked by:

1) Playing 400 matches in Brawl, and then beat Toon Link in a fight.

2) Beating Classic Mode on any difficulty (with Link, Zelda, or even Ganondorf), and then beat Toon Link in a fight. Can only be done after the Subspace Emissary is completed.

3) Complete the Subspace Emissary, then return to Stage 9 (The Forest). On the first portion of the level after the first mini-battle with a few Primids, a new door appears. Go in and beat Toon Link in a fight, then finish the stage.