Dave, the price of $2.60 per 8 x 10 photo for the Olympus printer includes both the paper and the ink, which isn't exactly ink but is the portion of the cartridge that supplies color for the dye sublimation process used by the Olympus printer. The price is based on non-discount prices charged by Rowe Photo, the largest photographic store in the Rochester, NY area, a store that generally sells at list price.
My own set-up includes the Nikon Coolpix 950 (now replaced by the higher resolution 990), Epson Photo 1200 printer (now replaced by the 1270), and Adobe PhotoShop software. I have recently been using Hewlett Packard Photo Quality Inkjet paper, which seems to hold the ink well. It is a matte paper. If I want a little more heft to the print, I use the slightly more expensive Epson Photo Paper, also matte surface. I personally prefer a matte surface, but I understand that the glossy surfaces available for these two papers will produce similar results.
I do not make prints without first adjusting the contrast, brightness, color balance, and other factors by making a copy of the original image. I never modify the original image, only the copies.
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