I thought I'd spend a little time looking at some of the more "fairy tale" creatures in the monster listings. Many are lifted right out of classic folklore and I think can be a real plus to giving a setting more of a fantasy/fantastic tone.
Usually, when I've talked about aquatic encounters in the past, I've focussed on the nautical. Nixies are river and lake dwellers, as opposed to mermaids and the like. They occur on the river and swamp wandering monster tables (there is no "Lake" table).
Nixie (from Cook)-
Move: 120' (40')
No. App.: 0 (2-40)
There are many variations of this creature in folklore, but in BX nixies are described as 3' tall water sprites, resembling beautiful women with green, blue or gray-green skin. The AD&D version includes both genders and are slightly taller. I find the 1e version a bit too "monster" and not "fae" enough for my taste.
At 1 HD and AC 7, it's small wonder that they are shy of combat (see the Morale score). While they do have weapons, they are hardly formidable (1d4). Of course, the point of the nixie as an encounter is not to have them attack the party.
The nixies' charm ability is particularly interesting to me for a few reasons. First off, it takes ten of them to charm a target. At 2d20 appearing at or near their lairs, it's likely that at least one PC could be targeted. I imagine this as a chorus. A song with a literally enchanting harmony that throws its web over the character's will.
Some creatures, such as a harpy, use their charm effects to bypass a character's defenses and then slay him. Not so the nixie. They will take the character under the water and keep him as a slave for a year. So the PC isn't dead, but is will be out of the adventuring game for a while without rescue. Further, unlike the spell charm person, the character gets no opportunity after the initial saving throw to break the charm before the year is up. I assume things like dispel magic will do the trick, though.
Next, it mentions that the nixies can cast water breathing on their slaves, but needs to be renewed daily. This is an interesting little tweak as well. It ensures that their slaves can be kept well away from the surface, making rescue that much more difficult.
A final bit of interesting magic is their ability to summon GIANT BASS to their aid! These fish are a bit more hardy than the nixies (2HD), but are not individually terrifying. What's scary is that EACH nixie can summon one fish. Now I'm extrapolating a bit here, but under the Giant Fish entry on X31-32, the closest type in HD to the bass is the giant piranha. (3+3 HD vs. 2). The piranha is described as 5' long. So I'd put the bass at approximately 3' long, which would weigh in at about 25 pounds.
Let's imagine the party is crossing a river or lake on a rowboat or similar and a dozen or so nixies show up. They croon one of the PCs into servitude and he starts climbing out of the boat.
Well of course his buddies aren't going to stand by and just let that happen, so they attack. The nixies summon twelve 3' long bass to defend them and all 300 pounds of these fish start shoving and rocking the boat. Next thing you know, the PCs are in the drink and at a serious disadvantage.
That said, I repeat that I don't think the nixies are best used as a combat encounter. I see the fae types not so much evil or malign as alien. Their concepts of morality is totally different from mortals. If they are immortal like in some fairy tales, why would the character make such a fuss about staying with them for a year?
Some ideas for nixie-related fun: The nixies might have useful information, or maybe they can retrieve something under the water for the PCs. If they want a slave, but the PCs aren't going to give up one of their own (and saving throws are made), bargaining with fairies is always rich meat for plot wrinkles. Since they are pretty much aquatic, maybe they want something from dry land they can't get themselves? If nothing else, an underwater adventure to rescue someone taken by the nixies might make a fun side quest.