In this case, the pictures were taken to a local super market's bakery, and they scanned the images and printed them on edible "paper". Each 8.5 by 11 sheet cost about $4.00 where I had it done.  Each sheet fit about 4 pictures. One can purchase an edible image printer, but the one I just priced was over $600.00. 

Please do not get discouraged!  You took on a pretty tough task for your first try.  A tip for the fondant, that I learned (I used powdered sugar to keep things from sticking the first time too)- rub down the work area with shortening, and the rolling pin too, rather than dusting w/ powdered sugar.  Keep on going!

Here is my entry for Craft Challenge #41.  I made this scrapbook cake for my mother-in-law's retirement party.  She loves to scrapbook, and now that she is retired, that is what she will get to do.  Every part is edible, even the pictures.  I used buttercream frosting, fondant, and food markers.