Mabel's Labels, hands down. I've used them since DD was a toddler and I can count the number that fell off anything on one hand. Usually that was my own fault (putting the label on the fabric of a life vest vs the buckle). They stick really well and we use them for kid gear, lunch gear, clothes, shoes, camping gear, electronics, college gear....When they have a sale, I stock up. I have sippy cups that DD outgrew where the label is still nearly new after being abused by a kid for several years.
http://www.mabelslabels.com/
I stopped using sharpies because I had to re-write them after so many washes. The labels are quick and clear. If the labels fall off (rare), they don't leave a mess. I honestly don't treat them very well. I labelled DD's lunchbox in preschool and the labels are all intact more than a year later. I even put sticky labels on the bottoms of DD's snowboots this year. Still there.