If something is so great you can hardly believe it, it is fabulous. You can have a fabulous first date or you can make a fabulous dinner.
These days, fabulous things are mainly wonderful things, but there's another meaning related to fable: some fabulous things can't — or at least shouldn't — be believed. If you friend claims to be a personal friend of the entire Chicago Bulls, but has never been to Chicago, that's a fabulous story that's probably not true. Also, any story involving a unicorn or wizard is fabulous in a literal sense. A great fantasy story would be fabulous in every way.