The Sunshine Forest first appears in Chapter 1, when the Pigmasks start a fire in the forest. Flint and Thomas enter the forest to find Lighter and Fuel. The enemies encountered here at first are Mr Battys Yammonsters and Fireflies. Inside Lighter's house, a Flying Mouse can be found.
After the rain douses the fires, Sunshine Forest gains new enemies, such as the Mighty Bitey Snake, Baked Yammonsters, Spud Bugs, Beanlings, and other enemies. The major boss of this area is the Reconstructed Caribou.
The Sunshine forest plays the part of the major location in Chapter 1, but it's use decreases as the game goes on. The party used at the time only goes through the forest a few times after Chapter 1. This is also where Lucas and the Dragos defeat Fassad in Chapter 3, as well as where the plan is formed.
This is pretty much the final time you will use the Sunshine Forest, except to meet the Magypsies again and to reach Alec's House. It is not very good for training either, so there is no reason to go there ever again. This area is also home to the Magypsy Aeolia.