ermaadkins you can also knit letters w/o using more than one color by using a pattern from just knits and purl stitches (the knits will be the flat "background" and the purls will be the raised letter part). Here's the chart I used, but I don't know what the copyright issues are...
http://members.aol.com/Val2571214/graphedalphabet.html
on the right side, knit the white squares and purl the green squares, and on the wrong side purl the whites and knit the greens... Easy!