The Secrets of Printing T-Shirts and How to Make Big Money!
Index color printing, also known as stochastic, diffusion dither, or FM printing is yet another way to achieve full color printed images on both white, light, and dark colored shirts.
The great thing about index color is that you are using "square dots" which do not overlap each other as in halftone printing, as the "dots" align side by side. Moreover, "square dots" being individual bitmap pixels are easy to output through any printer without the need for a RIP or Postscript capabilities. Index color printing can often produce results equal to simulated process printing, depending on the image and is easy to screen print.
The drawback to index color is that to obtain a good photo realistic looking print it is recommended that you have a screen printing press capable of printing at least 8 colors.
For an excellent step-by-step tutorial on creating index separations visit: http://www.teedesign.com/Technical_Info/Screen_Printing/Index_Separation.htm