Princess Daisy is the "other" princess in Nintendo's Super Mario Brothers universe. She first appeared in the captive hostage role in 1989's Super Mario Land where she was kidnapped by the space monster Tatanga in order to be his bride. Mario traveled to Sarasaland where he progressed through four kingdoms to face the evil spaceman and defeat him, thereby rescuing the princess. Unlike his relationship with Princess Toadstool (aka Princess Peach), Mario has no romantic feelings toward Daisy, but she and Mario's brother Luigi have been growing quite close in her recent appearances.

In Super Mario Brothers: The Movie Daisy was portrayed by Samantha Mathis, a role that found the character the princess of the dinosaur rendition of Brooklyn (Princess Toadstool was omitted from the film). Poor Daisy was left behind after Mario's adventures returned to the Mushroom Kingdom setting and she was a forgotten part of Nintendo history for years. However, in 2000 Camelot Software revived her character for a playable appearance in Mario Tennis for the Nintendo 64. She later went on to appear in Mario Party 3, Mario Party 4, Mario Party 5, Mario Party 6, Mario Party 7, Mario Golf: Toadstool Tour, Mario Power Tennis, and Mario Kart: Double Dash!!. The more she has appears in newer games, the more her character has develops. Unlike the prim and proper princess of the Mushroom Kingdom, Daisy is depicted as a bit of a tomboy who is more than willing to get down and have some fun. Despite their differences she and Princess Toadstool have become good friends and it appears that she'll continue to join in the fun in the Mario-themed sporting games.

Davidian says "Princess Daisy makes an appearance in Super Smash Bros. Melee as Princess Peach's fifth costume, she's the only one with a fifth costume too. (she plays the same way as the princess, iirc)", but I argue that that's just Princess Toadstool wearing Daisy's dress. One of Mario's outfits in the game is Wario's outfit, but that doesn't make him Wario. Know what I mean?


References:
http://www.classicgaming.com/tmk/
Thanks to kthejoker and Chris-O for reminding me of the Mario movie; I had repressed all memory of it ;-)