I have used the fabric iron on transfer paper and I think it likely works a whole lot more smoothly than ModPodge.
Print to the transfer paper (use mirror image on your image editing program if you use lettering.)
Iron on to the fabric.
ModPodge leaves a rubbery finish, so I think the finish with the two mediums would be similar, except the ModPodge might be more uneven. If you prefer that look, the ModPodge might be better. If you want an even look, the transfer paper will be MUCH better. ModPodge also works better with laserjet prints, so if you want a color print and you don't have a color laserjet, you might not have as good of results as you see online.