Ah geez, mention my name and I finally remember this guy:
That custom was made using the decoupage techniques you're talking about, Jeff. All I used was craft glue that was watered down. I soaked the paper until it was wet and bendy, then stuck it on the Minimate.
I used pictures from old Wizard magazines, so all the paper was glossy and fairly thick, which helped quite a bit. I'm not sure how well this would work with ink jet printouts - I think the decoupage would cause the colors to run and ruin the image. If you're doing your printouts on photo paper or something thick and glossy, I think you'd get better results.