If I have to produce my own decals, I first start in a program (Photoshop) and design or even take an item from a photo. And I am sure you know how to do this...

The paper I use is Matte clear, not gloss. I have found that gloss does not hold the ink as good and has the tendancy to produce three elements - first the paper itself, then the ink, then the varnish as seperate layers, so that when you come to use them the water gets between each layer and then you get the 'stretch' of the image....

I went through the hair pulling process untill I tried the matt paper, this is where the ink sinks into the surface and not sit on top... And I usually let the varnish dry for a good 8 to 24 hours before use and give the decal at least a 1mm border to stop the 'ledge' effect at the edge of the decal.

Hope this helps

Mike.