UPDATE: See the “definitive tutorial” post on how to make these.
I posted this video of the latest SMD stencil I made for my Moteino project. I ended up shrinking the pads by 8mil on this one, the reason being that the previous stencils I made I shrunk by 5mil and the stencil would dump too much solder paste, causing some solder bridging. See the stencil step through post for details how to make this.
I also discovered another very good method to transfer toner: silicone coated paper. I wiped a very thin layer of clear silicone on a blank sheet of paper (on half of it). After it dried I printed the mask directly to it. The iron method will give very good results, the toner will either transfer 100% or not at all. The spots where it doesn’t transfer are fixable with a thin Sharpie pen. The tool you use to spread the silicone has to be very flat and even, any unevenness will result in less perfect toner transfer.
Looks like you can buy silicone release paper pretty cheaply (quick search showed 12 sheets 8″x12″ for 8USD).