Yes: on the Paint or Photoshop. If you're only doing text then Word might be fine. Although I found photoshop elements to be helpful in arranging text. (see below)
As far as scaling, I suppose there is a way if you know the scale of the source material to do it scientifically.
I just print it out on plain paper until I get the size I want to make the decal just by eyeballing it. Also it helps if you print on plain paper and then cut a piece of decal paper, tape it on top of the printed artwork on the plain paper and run this back through the printer.
In this way you conserve decal paper and don't jam up the printer running "used" decal paper with chunks cut out back through the printer. My HP 5150 seemed happy with this arrangment.
Also if you have some "blank" decal stock left over from something else (maybe the maker didn't completely fill the sheet?) you can use this technique to recycle the leftover decal paper.
Try different printer settings, but I found that "generic photo paper" worked best for printing on decal paper. I also had trouble with the ink running while spraying the "fixative" (acrylic gloss). Clear lacquer might do better. If inkjet inks are water soluble it stands to reason they're also soluble under acrylic spray paint. Or just spray lightly and use multple coats.
To get white lettering I printed on white decal paper with photoshop set up to print white lettering on black background. Since anything besides an "ALPS" printer doesn't have white ink, the printer simply doesn't shoot any ink where the output is "white". Happily the model was to be basic black so I got away with this.
