I haven't made a quilt with alphabet letters yet, but I HAVE done it in stained glass. Here's what I do and how I'd do it with fabric. I use the computer and create a letter in the word processing program. I enlarge, bold, and choose whatever font I like. I then print it out, cut it out and then cut. If I were doing it on fabric, I'd trace the letter on freezer paper, iron it on the fabric, add 1/4" all around, cut out and applique.
Hope this helps.