OK, here's the lowdown from a Shrek expert (my 3 year old) as dictated to her secretary (me.) Lord Farquad wants to be a king, but the only way he can do this is to marry a princess. He has tidied up all the fairytale creatures from his lovely perfect (dukedom? earldom? whatever) and dumped them in the swamp, ie Shrek's home. In return for evicting them from his swamp, Shrek has to rescue Princess Fiona for Lord Farquad to marry. Neither of them know that due to a spell, she is destined to turn into an ogre every night until love's first kiss, when the spell will be broken and she will take on love's true form. From then on it's a standard "ogre meets girl, ogre falls in love with girl, girl falls in love with ogre, girl thinks ogre won't love her if he finds out she turns into an ogre every night, ogre thinks girl doesn't love him because he's so ugly" kind of story. Fiona very nearly marries Lord Farquad but is rescued by Shrek just in time. Love's true form turns out to be an ogre, so she's now green for good. I undestand Lord Farquad turns up in the sequel - I'm not sure how, being as when last seen, he was being eaten by a dragon.