So I have realized that I am infatuated with sugar lately, I haven't been going to bed until 6AMish so I'm up on the net and looking at dumb things on tv, but last night I saw this gadget, YUDU, that would probably be put to great use for stencil work like the Cricut but this would have the painted on look. Just thought I'd share! You can go to the site
If you go to their website, they have a video showing the process of how to use their machine from start to finish.
The screen for the screen printing from this though is just a flat surface so I would think it would only work for the top of the cake. Plus, I'm not sure that the film they use to make the image would necessarily be safe to put in direct contact with a cake.
But I like your thinking.
Yes, the issue is that the standard film used in screen printing isn't food safe. Although only very small amounts of the film might be imparted to food when screening, it still may not be a good idea.
Beth Parvu has some 30+ year old silk screens that are made with a food safe emulsion--I've used one to silk screen on chocolate. She is apparently trying to have some new, food safe screens made in order to market them, but I don't know when they'll be available.