If I may Add to this
With a good coating of CA decals will be practically indestructible. I have done many on wood arrows to circumvent breaking out my cresting tool. Even put on my Logo on my arrows too.
There are two companies I like to deal with whose prices are easier on the wallet. You can get both clear and white background paper (white is to make color decals.)
I use a graphics program called "Print Master" to create, adjust size, and print what I will use.
The method to use decals is:
Measure the circumference around the section of barrel you want the put the decal. I use the "wrap a string around mark then measure the string" method. As well the length of the barrel. Those measurements are the maximum dimensions.
Gather the pictures/designs and make your layout. Your Decal Paper comes in standard paper sizes. Although I have had to trim one side because my printer had issues. Remember to leave a space between pictures for cutting and trimming.
Make sure you "Set" the decals with a Clear Acrylic spray paint. Don't forget this or all your work just washes away.
Personally I use a warm water with a Drop of dish detergent.
When you drop the decal in the water, it will curl up, when it starts to uncurl, wait about 20 seconds, then pull out of the water gently slide the decal Mind you, be at your lathe or where your pen barrel is at. affix your decal. Let it dry for an minimum of an hour.
apply CA as you normally do.
If you want to lay down an initial finish prior too applying a finish? Absolutely do so. Just make sure it is dry, If you want to lay down a single coat of CA... Just give it a smoothing out sanding and quick cleaning.
Here are the links to the two suppliers I use.
http://www.decalpaper.com/
http://www.papilio.com
Any more questions on decals, just ask.