I have an SE 270D which I think is basically the same.
Yes, you can embroider words. Just press which letter you want from the screen. It lets you pick letter, capitals or not, size of letters, etc. And has several alphabets from which to chose. Only negative - hoop only 4x4.
What do I think of it? I think it's great for the price. (got it used on Ebay $199). Meets my needs so far.
HTH