Homebrew PCBs

Hi all, 

I currently use a plotter and a Lumograph pen as the etch resist for
making my pcbs. Instead of drilling I just solder the dip components
directly onto the copper side - kindda modified smt. So far this has
sufficed but I decided to move to real smt and that is testing the
limits of the pens ( .4mm with a fresh tip -  about .5mm practically )
which gives 0.016in lines ( and spacing ) with barely enough clearance
between tracks. 

I was thinking of switching over to the toner transfer method but was
curious what is the resolution that people achieve with this method -
i.e. is it suitable for smt. I've heard that the toner spreads a bit
when heated but not sure how much. 

TIA 
Deepinder