I have never had any problem with photo paper melting.
however, it DOES like to jam, sometimes badly. I used to get my toner patterns photocopied onto the photo paper, until the paper jammed up both of their nice copiers so badly they had to have a tech come to fix them.
my advice is to just buy some press-n-peel blue! you can find packs of 5 for $10 or so (try allelectronics.com) and since you generally cut off a small piece and tape it to regular paper, there's never any feeding problems. it is also far better at toner transfer than photo paper; easier, faster, much cleaner traces, (I have yet to see a single broken trace, it has come out picture-perfect every time) and it also adds that extra layer of resist over the toner, which helps DRAMATICALLY with resisting the etchant. (traces come out totally unscathed, instead of dulled by slight etching as usually happens with photo paper transfer) and since it is so good, it also allows you to use much finer traces without worry.. I used to use 16 mil traces for most things, and only go to 12 mils if I needed to squeeze a trace between two pads or something. with press-n-peel I use 10 mil traces for everything, (except of course when I need a much wider trace for a high-current connection) and they still come out flawless.
in case you haven't seen them, here's some pics of some of my recent etching jobs using PNP blue:
http://www.eegeek.net/electronics/pnpetching.htm
having used it a few times now, I will NEVER go back to any other paper/material for toner transfer, it is truly WORLDS better than all the photo papers/etc that I have tried. I'm convinced enough to say this:
if you are really skeptical of it, send me an email with your address and I'll mail you a small piece to test out.