There are some old threads here on the QB about photo transfer to fabric that are quite good. I will see if I can hunt up links to those threads. (I've never heard of using ModPodge for quilt photos.)
Edit: Okay, here is what I found.
http://www.quiltingboard.com/main-f1...c-t241814.html
http://www.quiltingboard.com/main-f1...t-t236710.html
http://www.quiltingboard.com/main-f1...s-t224205.html
http://www.quiltingboard.com/main-f1...c-t209934.html
Recently someone posted that this worked well:
http://www.amazon.com/gp/product/B000F3HMWQ/
For an important quilt, I would consider using a company to do the photo transfers. The ones that others on the QB have mentioned as being good include these:
http://www.fotosonfabric.com/
http://www.spoonflower.com/welcome
I have seen the above at quilt shows (not sure which company) and they were really nice -- bright pictures and soft fabric.