I've been frustrated by the same issues in the past, and in all honesty, I gave up and went a different route.
A tool like this is quite helpful in getting the exact image sizes that you want:
http://www.acdsystems.com/english/pr...otoslate/index
I then just trim the photos out by hand, or use a paper cutter (great investment!). Perforrated paper never seems to work out for me, because templates are so badly implemented across different applications.
Another alternative is an online service to get wallet prints from a place like
www.ofoto.com - if this is something you're planning on doing once, and you need quite a few and great quality, I'd suggest an online service.