The HP iron-on paper is NOT suitable since it is essentially a page covered with clear heat tranferrable plastic which is then printed with ink from an inkjet. You will mess up your laser printer if you use this by mistake.
I am using cooking parchment which is sold by Reynolds (the aluminum foil co.) as the stock for laser printing PCB artwork for iron-on transfer. It's sold in grocery stores in the baking or food storage section - around $3 a roll.
It is similar in properties to the label backing used by some people.
The useful properties of parchment are that it is designed to release things that would ordinarily stick to baking pans and cookie sheets. However, it holds the printed toner fairly well (the printed toner will flake off if it is crumpled or bent, but normal handling is fine).
It is also very heat resistant since it must stand up to oven temperatures.
It comes in rolls of 24 ft x 15 in. I cut off foot long lengths, then cut that in two to get 12in x 7.5 in sections. That is close enough to regular paper size to feed through the manual feed paper entry of my Laserjet 5L.
You need to make sure that your printer is set to use the darkest printing density to ensure a sufficient deposition of toner. Your results may vary depending on your printer make.
The parchment is very thin - like wax paper - so you need to use the manual feed and take care it feeds properly. It may slip internally if you misfeed it. I haven't had a problem. It also has a bit of a curl to the page due to it being sold in a roll but a pass through the printer will more-or-less straighten it out.
Once you have printed it, cut it close to the boundaries of the artwork so it won't curl too much when you apply it to the PCB copper. Make sure the copper is scrupulously clean. I use Twinkle cleaner, then alcohol to remove any residue after washing it in water.
Set your iron at the hottest setting, no steam. You will want to have a flat, non-metal surface such as a kitchen counter or cutting board. Protect it with a phone book or stack of newspaper, then lay a piece of cardboard or a manila folder on top of the stack.
Place the PCB blank on the cardboard, then carefully line up the transfer, toner side down, of course! Using the iron, run across the board from one edge to the opposite, then the same on the remaining sides.
You will then set the iron on top of the board, or as large an area as the iron will cover, for a few minutes. The toner will adhere but may not completely release from the parchment. Keep the iron in place. The large copper area will conduct heat away for a while, so you need to keep the iron in place. The parchment should not burn so you can let it set for a while.
Check again, let cool a bit, then see if the backing will peel leaving the toner on the copper. If not, reposition and iron again.
At some point, you will have almost all of the toner transferred. For those stubborn areas that won't take, you may have to use the tip or edge of the iron to press and work the toner off the parchment on to the copper.
I've found that thin traces and small detail transfer well, large areas not so well. You may want to try drawing outlines of large ground plane areas, then after transferring the outlines, fill in with a Sharpie or other permanent pen.
You will probably get 95 - 98% of the toner transferred. This should be enough to use after touching up with a Sharpie pen. I recommend checking the board anyway as even with a good transfer, you will still see some copper in spots. Use the Sharpie to fill these and any other bare spots.
BTW, this is not a great way to 'mass produce' boards. If you are making more than two or three, you may want to consider a professional service since the effort to cut, transfer, etch and drill really adds up.
