Another thought since this horse has not been beaten to a pulp yet. Costco pics are WAY too thin, and if you use a Sharpie, it could well show through... Sears type pics are printed on heavier paper and will likely do better with the Sharpie.
If cost or quality is an issue
another option is to take your own if you have a serious digicam, adjust size etc as needed, and print two to a page on real Costco type print-your-own off a USB stick. Not instant, but my digital SLR is much better than the Nicon CoolPix the guy used...
Can't wait for Do-It-Yourself biometrics
(that would be a great use for my super hi resolution scanner
)