Usually the point-of-sale software, card readers, and receipt printer come as a package, and don't play particularly nicely with 3rd part equipment. You make a good point, but part of the reasoning behind modern receipts (of the kind you hate) is that thermal paper involves the least amount of operator overhead - put in a new roll every so often, no need to worry about separate ink cartridges etc., plus they're fast.
If you want to propose an alternative, I'd start by obtaining a copy of Quicken POS (a common piece of software) and a consumer photo printer, to see how practical it is to print out custom receipts. Then you could look into commercial volume printing solutions and see what sort of budget you'd be looking at.
If there's one company that I would have thought could have pulled it off, it was Apple. I was pretty disappointed when I walked into an Apple Store to find the employees using Windows CE-based handhelds which, of course, printed the same uninspired receipts found everywhere else. I do hear they're trying to replace them with iPod Touch-based systems, but I haven't heard anything about whether or not the receipts themselves will also be upgraded.
If you want to propose an alternative, I'd start by obtaining a copy of Quicken POS (a common piece of software) and a consumer photo printer, to see how practical it is to print out custom receipts. Then you could look into commercial volume printing solutions and see what sort of budget you'd be looking at.