Weapons size Adjustments.
According to page 162 of the Dungeon Master's Guide:

One Size Smaller	Original Damage
1	1d2
1d2	1d3
1d3	1d4
1d4	1d6
1d6	1d8
1d6	1d10
1d8	1d12

Weapons that do 2 or more dice of damage have each dice reduce separately. Weapons reduced to below 1 damage are useless. For simplicity's sake, halve all ranges and weapons weigh only 1/10th as much as normal sized weapons. Cost is 1/2 normal price.

Example 1: Lets build a two handed sword for a size tiny fairy. According to page 97 of the Player's Handbook a weapon that is two handed is one size category larger than the wielder. So, we are looking at a size small weapon (one size larger than the Tiny Fairy). A great sword normally is a large weapon doing 2d6 of damage. A Medium sized great sword would do 2d4 and a small sized great sword would do 2d3.

Example 2:Lets build a dagger sized for a diminuative fairy. Normally daggers are a light weapon for medium sized characters. so we are looking at a size fine weapon for this diminuative fairy. A dagger is tiny and does 1d4, a diminuative dagger (used as a normal sized dagger for a Tiny Fairy) does 1d3 while a fine dagger would only do 1d2 points.

More Examples:: Tiny sized Longsword: 1d4 (same stats as a normal dagger), Tiny sized heavy crossbow: 1d4, Diminuative Composite Longbow 1d2

Armor
Page 105 of the Player's Handbook states: Armor for Tiny or smaller creatures costs half as much as that for Medium-size creatures (provided you can find an armorsmith who can even make it),[Fairy Smiths anyone?], provides half as much protection, and weighs one-tenth or less as much. [more is stated for larger characters].

Other equipment
For Tiny or diminuative fairy equipmen use a base of 1/2 cost and 1/10th size, weight, length or volume. IE. a tiny silk rope bought at a fairy store would be 5 feet in length, weigh .5 lb. and cost 5 gp.

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