Any vector based program is perfect for making decals. I use Corel DRAW Version 3 and 7. Using vectors instead of bitmaps will give you much better control over the quality of your images. You can freely resize them without any side effect ( unlike bitmap based programs).
But there is a catch. You still have to scan the original decal as a high res. bitmap and you need to trace it in order to get it to vector format.
This is quite time consuming and there is a learning curve to get good at it, but the end results are worth it. Corel DRAW does have auto-trace feature but it is not all that good. Again, there are many tricks to get it to work at its best.
If you use Alps, many decals will need a white undercoat under colored areas. Again, vector graphic program is quite good at doing this (and working with layers).
Peteski