I use royal icing. I buy the Wilton merinque powder and use the recipe on the can.
And I was just about to post a question about decorating cookies too, hope you don't mind if I ask here. My question is, once my cookies are iced (with my royal icing) and I want to add some detail, what is the best way to do this? I'm doing a Hey Diddle Diddle cake and decided to do the characters out of cookies instead of fondant. But I need to add eyes, whiskers, etc. Can I "paint" them? And if so, how and with what?