Building block letters in Minecraft is straight forward with this generator. For large block letters you can choose almost any block. For smaller 3x3 Minecraft block letters you will need to choose a block that has stairs and slabs.
If you're not looking for a generator here's a quick snapshot of all the 3x3 optimized block letters
Added: Minecraft style font, with stairs and slabs
Added: Pixel text generator, 3 fonts