I use the iron-on Velcro to attach my plates. The peel-n-stick Velcro is crap. Sew-in works well, too (but don't use a sewing machine with peel-n-stick Velcro; it will chew up your needle).
As mentioned above, use a heavier cloth for your vest. Jersey-knit material (like a t-shirt) is not allowed because it's really flimsy and won't hold the weight of your plates. It will also sag over time. Duckcloth is very popular, as is canvas. You can get both at a local fabric store or hobby store (and you can save money by using a coupon from a smartphone app or your local mailer).
I advise that you stay away from leather or pleather because it's really, really hot, but that is personal preference more than anything else.