I have been printing on fabric for over 10 years -- I make my own labels but also print favorite pictures out and incorporate them in the quilt. You need an ink jet printer (laser printers use lasers to burn the image in the picture -- I have seen some special fabric to use with the laser printers but have not tried them).
I would say start with the commercially prepared sheets and do some test runs -- the different sheets have different hands (the way the fabric feels). I have an inexpensive photo processing program and use it to over saturate the pictures before I print them because I like my images vivid and want them to look like the photographs on which they are based. The fabric absorbs the ink from the printer -- the photo paper does not absorb the color. I play a lot with the level of saturation until I am happy with the result then make notes. I have tried Bubble Jet Set, but I am usually in tooo much of a hurry to take the time to prepare the fabric. I follow the directions that come with the paper, but before I use the pictures in a quilt, I also heat set them with an iron even if the directions don't tell me to. I think it stabilizes the colors.
Most of my picture quilts have held their color fine -- as long as I keep them out of the sun (but then regular fabrics have issues too).