1. Using a Word processor, like M.S. Word, I created a Poster with what I wanted to engrave onto wood.  I experimented with size and fonts, but I finally got it right.
2. I used a gluestick to stick my printed poster onto the subject piece of wood I wish to engrave.   I now have a piece of wood with a paper template on top.
3. I installed the Plunge Router attatchment, model number 335 onto my Dremel, and bought the Router Bit set. 
4. I experimented on a s**** piece of wood until I found the proper depth.
5. Then I experimented some more until I had the right bit I like in the Dremel.
6. Once I was happy with what was on the s****, I went back to my good piece of wood with the template glued to it.
7. Following the letters and patterns on the template, I engraved my pattern onto the piece of wood.
8. After engraving,  I used an orbital sander with 120 grit sand paper to remove the rest of the paper from the wood.
9. I stained it.
10. I clearcoated it
11. Now I have my finished product.

That is how I made signs out of wood.  I hope this helps you with your idea, or were you thinking of using the scroll saw to cut the letters out of wood?  Because the paper template idea can work with the scroll saw as well.

Goodluck!

If you live to love, then you'll love to live!