She was the miller's daughter who Rumpelstiltskin taught to spin straw into gold. In the familiar story, Rumpelstiltskin does it for her, but in the TV series he teaches her and tells her his name.
She ends up marrying the prince and giving birth to the evil queen who tries to kill Snow White. I'm not sure how, but Snow kills her in the episode. By this time she's Barbara Hershey. There are lots of flashbacks.