The pounce pad works well to transfer the design through the screen print type stencils, but the design doesn't stay very long. The vibration of the machine rattles the powder right out of sight. I think some people use hair spray on the design to hold it in place like a fixatif.

I would still use this method if I had to, but I would only mark very small areas at a time. Ordinary handling makes the design disappear.

I use the paper for quite a few things and wouldn't do without it.

For the quilt I am currently working on I am using MUV's method of placing an applique fabric onto the main fabric, then the tracing paper over the applique fabric - then machine sew it all down.

I've also used it to quilt motifs. ETD - it's not my favorite method to quilt motifs because the paper is hard to work with under the machine - but sometimes it's the best way to quilt motifs.

And it's awesome for paper piecing ... the paper tears of easily and the little bits that might stay behind just wash out in the laundry.

No, but then the paper is seldom in contact with the quilt for more than an hour or two, plus the inked surface is to the outside. I use a DSM for machine quilting and work small sections at a time.

I have however never done this on white fabric, so I'll experiment in that case thanks to your warning.

yes-
when i use a stencil i either use a chalk pencil or my pounce pad- depending on the stencil and the color (my pounce chalk is white so not a good choice on white or real light fabric)
i use the paper alot- i like it- i use tracing paper once in a while but sometimes the yellow paper is a better choice for seeing what i am doing- all are good in their place- it did take me a few years before i finally started using the pounce- but once i did i found it a good choice at times.