I started off with some plain black letters I bought from AC Moore, and a box of acrylic paints. As this was my first totally DIY painting project, I made the mistake of NOT sanding the letters before I painted, which resulted in me having to do about 5 coats of paint on each letter, while waiting for them to dry in between, what a nightmare!!
Once I got the base colors down, I created the little accessories. I actually used recycled boxes to make the hats/ears/bows. I simply drew the design on the blank cardboard side of the box and cut them out, then painted them! This project took about a week total, considering dry time between each step. Once everything was dry, I just hot glued the accessories onto the letters, and TA-DA! here they are! They came out great and I couldn't be happier with the result!
I've thought about trying to sell on Etsy, but I'm not sure people would appreciate how fragile they are with the hot glued cardboard accessories! oh well, works well enough for us!