I have ordered eighths from Fabric Shack, and their shipping is minimal. I just discovered Two Bees, and they will cut 1/4 yards, and fat quarters. The Patchwork Co. sells 1/4 yards, as does The Christmas Shoppe. The Calico Cottage Quilt Shop offers a fat quarter option on most of their fabric.
http://www.twobeesfabric.com/index.htm
http://www.fabricshack.com/cgi-bin/Store/store.cgi
http://www.thepatchworkco.com/
http://www.oldstnick.net/
http://www.thecalicocottagequiltshop.com/