It's been a while since I've done much decaling. If I recall correctly...
My favorite decals are Champ (Champion Decal Co., now out of business (sob)). I very rarely have any trouble with them. Walthers and Herald King are my close 2nd and 3rd choices - with Microscale being a distant 4th. Why 4th? Well, I'm kinda "ham-handed"; Champ decals seemed to be on a thicker carrier layer, which made them sturdier during application. Microscale appears to be much thinner to me - and thus, more delicate. Yes, I've used Microscale; they appear to be the only "big" manufacturer left in the decal business. And their decals are very good looking. What I miss are the "generic" railroad sets - where you get a few heralds and/or logos, the railroad's name, and the "number jumble" which allowed you to get some different numbers without applying one number at a time.
As for application: I do not use a setting solution until after the decal is in its final position -- just plain old water, puddled on the model's surface, slide the decal onto the puddle, move it into position (this is where the sturdier decals are more to my liking). The next step is to use the edge of a paper towel to wick away the excess water. Then I apply the setting solution - and let it completely dry. I've had pretty good success, so it's good for me. Your mileage may vary. Oh, one other note; I very carefully apply the setting solution around the edges of the decal. After that dries, then I can go back and add a "full coat" to the entire decal, bonding it to the painted surface. If there are any air bubbles (I get them once in a while), I lightly pierce the surface of the decal, then apply more setting solution.
One caveat; I rarely do lettering over ribbed or uneven surfaces. When I do, I use pretty much the same methods, but it may take more applications of the setting solution to get the decal to settle into the detailed surfaces.
I do not use dry transfers -- I've never had any luck getting them into the right position (remember the "ham-handed" part?). And with dry transfers, you only get one chance.
As for applying numbers... using only water, I roughly position each digit with a paintbrush dipped in water. Then I nudge them into the final position using the tip of an X-Acto knife with a #11 blade. I look at the positioned numbers from several angles, and if I'm happy with their positioning, out comes the setting solution. And if they're off a bit... by using just water, I normally have enough time to correct the positioning.
One other note - I NEVER apply decals over a matte surface - always gloss surfaces. After all the decaling is done (and dried for at least a couple of days), then I apply Testor's Dullcote to get the desired matte finish. As a bonus, the Dullcote adds a protective layer over the decal. (Once again, my tendency to be "ham-handed" has taught me this lesson.)
Sorry for being rather long-winded...
Regards,
Tom Stockton