Sparkfun have a great
tutorial on how to use a solder stencil to make placing SMD components easier prior to using the skillet reflow method. It is awesome just how well this works. However, getting a stencil made and shipped takes time, and it is not cheap for one off prototypes. This post describes what worked very well for me. If I was going to do hundreds of boards I might use steel, but this is cheap and easy. The soda can aluminium can thickness is also about perfect to put just the right amount of paste on. Read the following like a tutorial. I assume you can do toner transfer and you know how to handle chemicals safely.
You will need: A soda can (full helps), scotchbrite scourer, toner transfer stuff (see above), Phosphoric Acid (sold as rust or aluminium cleaner from a hardware store), Hydrochloric Acid.
Step 1: Make sure you select an un-dented soda can, scour off the paint on the outside of the can until it is smooth aluminium and clean with water. This is easier when the can is full. Empty out the soda (don't drink it - that stuff will kill you!)
Step 2: Carefully cut the can to get a sheet of aluminium. Try really hard not to bend it. You want a smooth sheet. Flatten it by pulling across the edge of a table, or under a ruler smoothly. Cut out a bit about 2cm larger all around than the PCB. Use the scotchbrite again to remove the coating from the inside of the can to get to bare aluminium. You might be tempted to leave the inside on as a resist, but it will probably have micro holes in it by the time you etch. Also it is more difficult to remove after etching.
Step 3: Prepare the artwork. Ensure you come in from the edge of your pads by 4 mil all around. The etched area will be larger than your artwork, especially in fine areas. In eagle you can use the design rule setting Cream|Masks to change the tCream layer to be smaller than the pads. Export the artwork, make it negative (using MS Paint), and mirrored. The last part is important. You might think you can just flip the stencil over, but the etched hole walls are at an angle and smoothing on the paste works best if the holes are larger on the top than the bottom.
Step 4. Transfer toner like you are used to.
Step 5. To prepare for the etch mask the bottom side of the board and around the edges of the toner with clear tape. It needs to be clear so you can judge the end of the etch properly.
Step 6. Prepare the enchant. I use a 50:50 mix of Phosphoric Acid (mine is about 600g/L) and HCl (30%). The exact proportions do not matter. This etch works because the Phosphoric acid removes the oxidation, while the HCl attacks the bare metal. I dilute the etch mix with water to about half strength to slow the etch. I think diluting with methylated sprits is probably a better idea. That would help to reduce the foaming I think.
Step 7. Etch. It will start really slow, then gradually speed up as the Phosphoric Acid removes the oxide layer. Soon you will see bubbles forming and it will start to foam. Constant agitation is your friend. For me it takes about 10 minutes to etch through the thickness of the soda can. As it progresses make sure to regularly check for the end point (like every 30 seconds or so). If you etch for too long the undercut will make your paste stencil holes to big and join up. For most pads you will see that they etch faster near the edges. The trick is to stop as soon as the edge of each pad is 'cut' by the etch. Check by dunking in water and looking at the bottom with light from behind. Do not worry about the middle of each pad, the bottom tape will pull that away when it is removed.
Step 8. Remove all of the tape carefully then remove the toner with toluene or xylene.
Step 9. Dry and check. Follow the Sparkfun tutorial to do the pasting. I smooth the paste on with a razor blade. I got my paste from DealExtreme, it seems to work with fine pitch SMD components.
Below is a picture of one of my stencils. Note the fine pitch SSOP components.