knitting letters?

[myjoyoverflows]

I'm not new to knitting...but I've done very little in the way of anything...well, different than just a normal stitch. What I'd like to do is make some like, block squares with letters on them.

I have never knit with two different colors before...I have never done any kind of pattern with two colors or anything.

What I'd like to do, is make a blanket out of knit squares...and in some of the squares I want to knit letters spelling out our family name and stuff like that...I just have no clue how to make letters inside what I'm already knitting...with another color...am I making sense?

I feel kinda silly...'cause I've been knitting for 10 years, yet know so little...but I would really like some help with this if you could...thanks in advance!