My daughter asked me to make this cake for her birthday this weekend. I've never made a tiny thing like the little fondant cupcake there...would that be solid fondant, or do you think it's a real cupcake underneath...or should I make the shape out of cereal treats and cover it?  

hmm..I don't think I added the photo correctly. Here's a link to the cake creator's blog :)

http://www.ilovedoingallthingscrafty.com/2013/10/despicable-me-2-minion-cake.html

it really depends on the size of your cake.  If your cake will not be huge, I would make the cupcake from fondant mixed with some tylose. 

Ato me it looks like a fondant decorated regular sized marshmellow

for size perspective, it is sitting on an 11 inch cake and the minion is made out of 6 inch cakes

what does the tylose do to the fondant? I'm not sure if I can get that locally...I will check today though.  I don't have time for an online order at this point.  We don't have much for cake supplies where I live :(