I still haven't had a chance to try them, but I bought iron ons from Amy. If you search google for Amy's Iron Ons, it's the top result. She is active here on the DIS. I purchased iron ons from her and they came very quickly. From what I've heard from others, they are a really good quality iron on, better than what you get at the store.
I have our designs all made for when we can take our trip, but our trip keeps getting pushed back and I didn't want to make the shirts until we were going in case I change my mind about designs. I just made some in photoshop but you could use any free program like paint.net or gimp to do it as well.
I bought t-shirts for us at
Walmart, they were $3-4 shirts/each for DH and me and then a pack of white Hanes for DS. Though since our trip keeps getting pushed back, I may have to get another pack for him before we go since he's closer to a 3T now than a 2T and I wanted them large on him. At least I've been able to use the shirts I bought as PJ tops in the mean time.