Okay I did some googling last night and I found this tutorial http://allysonhill.typepad.com/allys...our_own_l.html
for making labels with printable fabric. So I went this morning and got some of the sheets as well as a new color printer (bc it costs less than replacing the ink in the one I have!) and I'm gonna try it out later. I'll let everyone know how it turns out!
Thanks for all the suggestions!!!