I used Avery light transfer paper. With sales tax it was about $22 for 12 sheets. Sounds expensive, except that I was able to copy two transfers onto each sheet thus making the cost of the transfer around .91. So I am still under $2 per towel. Very reasonable indeed. I downloaded some images from the Graphics Fairy, resized them in my Word Pad program and transferred them onto the transfer paper. One word of caution. If you are dealing with the printed word, be sure to make a mirror image and also check the top and bottom so your image is not only reading left to right, but you also do not want it to be upside down. Just follow the directions and there you go.
I included photos of the first two towels I did. See how yellow they got? I left the iron on them too long. Not a problem. I should keep a couple for myself just so I know how they will wear and hold up to washing.
I received a comment from another blogger that tried these to give as party favor gifts. She's a brand new blogger and she did a great job and used three different crown transfers. You can check out her project here. Thanks for sharing, Susan.