I think playability has to do with how Lego-y you want your stuff to look, as oppossed to what type of material you use. I personally have no experience with water-slide decals. I hear that they are the best for making the stickers seem official. They are also the hardest and most expensive to use. I have used sticker paper in the past. I'm not too fond of how the ink manages to chip and the edges can lift and bend. The method I use is to print it on regular paper. Use packing tape to cover it and scissors to cut the edges. Here are the pros and cons.
Protects the decal
Gives it a shiny surface
Keeps from damaging the original print
If you cut the tape wrong, it looks bad on your custom
you still have sticky substance on the minifig
I hope this helps
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