The day after the Second Day of Darkness, Mikage and Anthy were seen taking care of a red-haired baby in the Rose Gardens. People asking the two about the parentage got two disparate (though not conflicting) answers:
Anthy: She's Mikage's daughter. Mikage: She's the child of a dream.
This immediately set off a string of rumors that only grew with Mikage's leaving the child in Anthy's care during his foreign service assignments as the newly-appointed Ambassador of Amber. Even more rumors abounded about the ring the child was wearing, or how the child sprang forth fully-formed in the span of a night.
Nausicaa grew up in this environment unscathed by all the strange tales of her origin. As soon as she was old enough she came along for nearly every single trip her father went on. She also showed her affinity for Wind Magic early on, and seemed fascinated with the idea of flight.
Her father sent her to Ohtori Academy to get 'a proper education as befits a Princess of Amber', but only months after the start of her education she sailed back into Amber (on a trade ship), walked the Pattern (proving that she was indeed, Mikage's child), and promptly disappeared.
She reappeared about a month later flying onto the deck of the Dreamchaser on a glider she called a 'mehve', with a fox-squirrel named 'Teto' on her shoulder. Much to her father's consternation, she refused to return to Ohtori, saying something about words being 'dead without experience to base them on'. Mikage reluctantly allowed her to become part of his diplomatic party to the Golden Circle, where she learned the finer points of diplomacy (as well as the best ways to put down an opposing negotiator). Mikage and Nausicaa are now quite respected around the Golden Circle, due to numerous treaties they have brokered between these kingdoms and Amber.
Nausicaa's heroic deeds during the Herald Crisis are too numerous to mention, but can be found in the UnS Timeline.
In the aftermath, Nausicaa has taken over her father's job as one of Amber's leading diplomatic special envoys. She's also married Kaede Galfordson, but has yet to have any children. She is most noted for her involvement in the treaties which ended The War of Demetrius' Son and the Second Melnibonean War. You don't see Nausicaa too often, but she seems to have a kind word for everyone, except for Yuki and Lord Atleby and Munchausen, none of which she's on very good terms with (something to do with her Spikard and the Day of the Dead).
Mindcontrolled by Nemuro Hall after Mikage died, Nausicaa is in mourning for her father and very embarrassed. She has now headed into Shadow with Akari.
This trip ended in tragedy, and now Nausicaa has perished, returned to the Dreams from which she came.