I have had success with waterslide decal paper. I used it on pint glasses too, but they only held up for a few washes on them.
KEG 1: Light Lager
KEG 2: Swapmeet Special (APA) *2nd place 2009 WestEnd Fair!
KEG 3: Irish Red
KEG 4: Oatmeal Stout *3rd place 2009 WestEnd Fair!
KEG 5: soda water