Okay, first you need the right paper. Inkjet ink, as you found, beads up on regular decal paper. Micro Mark (www.micromark.com) sells inkjet decals paper that takes the ink just fine. You then have to spray a fixative coat (they sell that too) to seal the water-based inkjet ink so it won't run off when you dunk it. You have to remember that inkjet ink is transparent, so it'll only look right on a white or light gray model.
The best home printer for decals, hands down, is the Alps 5000. This is the printer JTGraphics, Thomas Models, Tango Papa and other garage companies use. It prints from opaque wax ribbons, including white and metallic gold and silver, on lazer decal paper. Unfortunately it's out of production, so ebay is your only source.
Having your artwork xeroxed onto blank paper at a Kinkos or something is a decent option. Be careful, as color lazer toner tends to flake off decal paper if you rub it or bend it. Again, there's no way to do white, and the colors are mostly transparent. Also, I could never get the printed colors to match my screen colors when I went to a service beureau.