I think I answered some of your questions in another post but something else just occured to me. If you do licensed work (ie: cartoon characters:elmo, spiderman, the like) without permission from the companies and get caught. BIG fines. If you do a big enough volume you can afford the licensing fees, I know some folks get around this by doing the cake in the colors of the character or a generic "city" and have the client add the actual plastic characters etc.
Living in Columbia, home of the MU Tigers, you see alot of this work, the stores, bakeries have to pay to use this logo. It is a $100 application fee plus 8% of profits. Just to give you an idea of how it works.
I know some of us do licensed character stuff, we also have to be careful. If you are a licensed business I think it could be harder without permission.
Anyone else have thoughts?