Hi Mitch
September 2008 issue of Flexo magazine has a very interesting article about graphic treatment for shrink sleeves. It will show you around the works. We use a very simple but a bit expensive software from Esko. It is part of Packedge software. I think, if you are well familar with Illustrator and Photoshop and you read the article carefully, you will find tour way. There will always be trial and errors in that specialty. In the early days, I would ask printers to print me some grids on shrink material and I would inkjet on the substrate and then shrink them myself to be able to figure out the outcome.
Good luck.
Luc St-Pierre
Prepress and Color Management