Real aircraft have painted-on stencils. Waterslide decals are printed on a clear carrier film which is usually visible after application and does not convey the "painted-on" look that dry transfers will. While more care is required during application, the result is such a marked improvement over waterslide decals that you will probably want to use dry transfers on all your models!
IMPORTANT NOTE ABOUT DRY TRANSFERS: Unlike regular decals where the lettering is attached to a clear carrier film that will "silver" if not applied to a glossy surface, with dry transfers the individual lettering is printed directly on the backing sheet, and is applied to the model directly through light rubbing. As a result, dry transfers do not require a glossy surface, and in fact will not stick well to one. For ease of application, it is recommended that the dry transfers be applied to a matte surface, as that will provide the "tooth" needed for the transfer to properly grip the surface and come free of the backing sheet. If a glossy finish is desired, a gloss topcoat can be applied after the transfers have been placed on the model.