Re Transfers & converting images:

I work with Photoshop often as part of my job, and have taken several
classes on using it. I haven't been satisfied with the several techniques
letterboxers use to make 'stamp' images. Photoshop (and Paint Shop) use a
mathmatical algorhythm to divide everything in an image into black & white.
Unfortunately, your eyes don't work that way.

I still use my own eyes to divide gray tones into white & black (printing &
nonprinting). But I make Photoshop help me first. I take a color or B&W
photo. convert it to grayscale, then reduce it to just 3 or 4 shades of gray
by posterizing it (image -> adjust -> posterize, use 3or 4 levels.)