I know I'm really late for this bus but it IS possible to print on fabric with freezer paper! I'd like to try it sometime. I guess the freezer paper stiffens the fabric enough so that it won't bunch up in the printer.
It is recommended to use 200 thread count cotton fabric like quilting weight cotton. Also only use on inkjet printers. As for washing and the colors running when getting it wet there are several options to prevent this from happening. First you can buy waterproof inkjet ink. Second you can treat the fabric beforehand with Bubble Jet Set. Third you can treat the fabric after with Scotch Guard or any kind of fabric protecting spray. You can also soak the fabric in vinegar for a couple hours which is said to help as well! And be sure to iron your fabric with the hottest setting after you print to set the ink.
Check out Domestically Speaking's framed burlap print above! The possibilities are limitless. Think of all the wedding uses alone;) I bet if burlap works then canvas would as well.
Oh my gosh, if you had a large format printer (like this one) you could print your OWN fabric by the yard. Now THAT would be cool!