To kill time while my wife and I were waiting for our daughter to get out of her night class tonight, I went to the college library to consult their copy of The Oxford English Dictionary. Among the handful of words I wanted to look up was fae, often used in recent literature as an alternative for fairy.
Well, according to the OED 2nd Edition, Volume V, 1989, the only definition for fae is a Scottish variation of foe. There is no entry where fae equates to fairy. Fay, on the other hand, does.
Since I like to sprinkle my works with archaic and obscure words every so often (one of the other words I looked up was gast - an obscure variation of ghost), I think I'll stick to the more traditional spelling of f-a-y. It goes back quite a way, and suits my style. And I'm just more comfortable with it. F-a-e, even if it is currently acceptable within certain circles, just seems wrong to me.