Re: How is waffer paper made?

Interesting question. My first response would be "like any other paper" 
which is not particularly helpful, I'm sure! Basically, all paper is made
by taking the long chain fibres of natural plants and squeezing them 
together to form a mat. The molecular interactions between various organic
functional groups then holds the fibres together.

However, I went in search of a better answer. I found the following, on the
web, at "http://palimpsest.stanford.edu/don/dt/dt2873.htm":

"Rice Paper

A non-fibrous, delicate, paperlike material made from the pith of the rice 
paper tree, a small Asiatic tree or shrub, Tetrapanax papyriferum, that is 
widely cultivated in China and Japan. The pith is cut into a thin layer of 
ivorylike texture by means of a sharp knife."

This would seem to imply that the paper is made of the pith (the "fibre
source") and, in traditional fashion, is likely generated by interweaving
of the fibres followed by some form of mat making (i.e. pounding or 
rolling).

I would suggest that this process is probably automated for the mass
production of rice paper for commercial sale. Paper can be made of pretty
much any fibre. Edible paper - such as rice paper - is likely to be made
in a similar fashion. The distinction is that the source of fibre is 
"starch" and not cellulose. Starch is an edible carbohydrate versus the 
non-digestible cellulose used for ordinary paper.

As to the transfer to cakes, there are several craft sites which discuss 
this. In essence, the painting in food colours is done on a felt and then
transferred to the rice paper. Once the paper is on the cake, if thin 
enough, it would easily dissolve (being little more than starch) in the 
slightly wet icing, leaving behind the food colour design.

Hope this answers your questions!