That's what the inspectors think out my way (Sacramento, California). That's the only thing they'll accept for labelling breaker spaces in panels. I can't argue, just about any stick-on label will eventually fall off.
I carry a bottle of some stuff called "contractors cleaner", a citrus-based solvent. A little on a rag will take off the remnants of a paper label if you're re-labelling a breaker space, or will remove the magic marker if you goofed and have to change a label.
2002 has addressed this, in Article 110.22, but left it unclear of what is considered sufficient durability, Basicaly left judgement up to the (AHJ). I presonally carry a label maker that in my opinion looks more perfessional, than a marker. I have seen marker indentification look perfessional, than I have seen them also look like caveman art. Some guys even use the old press lettering (one click at a time) device. Works OK. The ones now I'm seeing that I like is printed labels with a clear sticky back envelope stuck to the disconnect, and you can make them from your own PC. Then change them latter if need be.
[This message has been edited by aphares (edited 12-23-2001).]
Outdoors, many inspectors in this area (SoCA) won't accept felt pen as a permanent marking. It virtually disappears after some weathering. Instead, they'll accept the use of the "paint pen", which applies enamel, and is just as easy to use as the felt pen. Many labels won't withstand the test of time either, the adhesive loses its grip, and they fall off. The newer style of labelmaker is better for this, but the ink doesn't stand up to UV very well; it fades fairly quickly.