If you don't mind the slop inbetween paper and the quality of a home printer then that method works great. When I get my overlay printed however I'm going to have to take it to kinkos becaues I want the entire sheet smooth and photo quality. If you had a nice printer and an ink cartridge to dispense, using photoquality paper and rubber cement wouldn't be the worst way to go, I made a few art projects using photo paper, looks incredibly sharp and everything. There's just always those spaces between the paper that your eye will pick out no matter how carefully you match them up.
-Cool psp tutorial