I use an X-acto knife and make sure to insert a brand new blade. The cost of a new blade is worth getting the decals cut right and easily. I also grab a small pair of tweezers, a small paint brush with medium-stiffness bristles, a shallow container such as a small painting palette or a saucer of a cup-n-saucer. Purified water and Walthers' Solvaset are the medium. Have a sheet of paper towel handy, for soaking up excess water. I need magnifying glasses for this work. Finally, you need a good drawing or prototype photo that shows where all of the individual decals are to be placed.
(external link: Walthers' Solvaset)