I have done it. You use that paper called, I think, Golden Threads. You trace the design you want on it and once you have sewn/quilted it onto your quilt, tear it away. It tears away quite easily, but where the are small sections, you will need tweezers to pull the paper out, which is very time consuming.

It comes in rolls, 20' long I think.

Golden Threads -- Shop | Category: Notions | Product: Golden Threads Quilting Paper - 12" Wide