I read somewhere that a design or picture can be transfered to a cake using a projector. Does any one have an idea how this is done? useful suggestions will be appreciated.

Yes..Kopykake.com sells projecters for this very thing.I have the 300XK model I bought several years ago and use it all the time!! I print off an image from the web and stick it into my projecter and it enlarges to draw on the cake with icing.You can make the image smaller or larger.Very similar to a overhead that teachers use in school except it shines the image down onto a surface and not at the wall.

Here's a great cookie post about projecting an image, but it can also work for cakes: http://sweetopia.net/2010/06/decorating-cookies-with-a-kopykake-projector/

I have been looking around for a used one - the new ones are expensive.

No such luck. Not even eBay! I think I might have to break down and get one. A vertical projector is hard to find. I did see a couple at an art store.

DON'T buy those cheap projectors they are awful. I went to an art store and they wanted $30 dollars - I thought SCORE! Until I asked them to take it out of the box and make sure it "worked". Not only did the picture seem blurry but you could not see the image. They tried to take it in the closet saying it needed to be darker....yeah right!