I have made several using the "iron on transfer" method. So far, the people I have made them for haven't complained that the photos have worn off or anything. But then again, they are not the kind to drag around. These hang on walls or lay on back of couch.
What I did was make my blocks with the sashing first - basically made the whole top. I used Quilter's cotton for the part where I wanted to put pic. Then I ironed on the pics. (don't forget to reverse them when printing on the transfer paper)