Not to put a damper on it, but I think it's difficult to produce enough labels at home to justify buying the printer, ink, and paper rather than just having them printed at Fed Ex or whichever store. That's not to say that's always the case though - I know a professional photographer who uses a ~$250 Canon printer to print all his 8x10 photos which he sells all over the place, and he raves about the low cost compared to having a place such as Adorama do his prints. BUT, that's for photo printing, and Fed Ex is pretty cheap for regular paper color prints. I tried to find the name of the Canon printer he uses but I can't locate it.
I use Fed Ex, I think it comes out to about $.30/page, and I usually find a 30% off coupon. I fit 5 labels to a page usually, so it's pretty economical. The biggest headache for me is just stopping at the store to pick them up.
Also, regarding adhesives, I've used a spray-on adhesive. It sticks to the bottles really well, and works great when you take brews to a party where the bottles are submerged in ice water. However, the spray on adhesive is an absolute pain to work with and apply without getting it on your fingers and getting your fingers stuck to the good side of the print. I also coat the good side of the print with a spray on protector first.
Best of luck!