mikeyjames -
I think you can print onto tranfer paper from PS, however it also depends on how big your making the final product. If the original needs to be blown up to a bigger size then you run into Pixelation issues and should use a program like Corel or Illustrator to vectorize the design so that you can adjust the size without issue. (this mostly happens when you scan an original design or drawing then manipulate it in PS). If your creating the design in PS already then I don't know if you will have quite the same problem, but you can def. test by enlarging your design in PS and see how pixilated it gets. If you dont need to enlarge the design then I say your golden and can print to tranfer paper.
Hope this helps.