I did my first FBCT last night (or early this morning, rather) using the technique on CC. It went *okay*. I made the buttery buttercream recipe it recommended, but that icing doesn't crust, so it made smoothing it out VERY difficult. Also, when I put the transfer on the cake, it stuck out of the cake a bit (kind of 3-D, but not in a good way), and I had to pipe around it a bit so the transfer wouldn't crack. Unfortunately, I can't really smooth the icing around it at all because the icing doesn't crust, and also because if I fiddle with it too much, the outline flakes off. Here's a pic... Keep in mind I tried to only take flattering ones, but maybe it will give you an idea... [/img]
Hmmm...not sure about all that you asked but I use this crusting BC recipe for my FBCTs and it seems to work fine for me.
http://www.cakecentral.com/cake_recipe-1948-Butter-Cream-with-real-butter-for-decorators.html
And because of the different layers the FBCT requires, it will lay on top of your cake and be higher than the cake isurface tself, sort of like a 3-d effect. I'm not sure what you mean by "3-d, but not in a good way".
I still think yours looks really cute. We are always our own worst critics. 
Thanks for the praise and tips! Unfortunately, up close it looks rather smudgy. Definitely next time I'll use my regular buttercream recipe (I use the Class one except I use 1/2 butter 1/2 crisco). What I meant by the "bad 3-d effect" is that it actually started cracking a bit because it sat higher off the cake, and when I tried to pipe around the outer edge a bit to give it additional support, it just ended up looking smudgy. I guess I'll just have to practice a bit more, but maybe with something simpler next time! 
And, maybe if I use a crusting buttercream, I'll be able to get all the air bubbles out a little better.
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