yes, you can use a good quality (high thread count) quilting fabric and freezer paper and run it through your inkjet (press the freezer paper to the back of the fabric as a stabilizer, then trim it to fit through your printer, making sure edges are sealed well).
for it to be washable, you should treat the fabric before printing with something like bubblejetset (available at most quilt stores).
it's a lot of fun! i make most of my labels this way. i treat and prepare a bunch of fabric and keep it in a folder near my printer.