TO DO THIS:
1) Load the Grayscale image into your Channels palette, Invert it so that the background is black
and the characters white (make it look like a photographic negative.) Create a new layer and then load the inverted Channel as a selection. Fill it with black or any other color.
SELECTING LETTERFORMS:
The advantage of having the characters separated from the background is that it will enable you to easily select, then cut and paste individual letters or shapes onto their own layers in your working document. This will let you have the most creative control and flexibility in composition.
A few individual characters have, in some instances, been left deliberately a little grungy for textural effect. If you don't want that effect then just be a little more careful when you select these particular letterforms.

OPACITY & SCALE:
Once you have isolated individual characters onto separate layers in your working document, you can easily explore combining and arranging them, varying their opacities, blending modes, etc.
Each image has been scanned at either 300dpi (Volume 1) or 600 dpi (Volume 2), giving you the opportunity to use them at relatively large sizes for posters or print work. If you decide to use them at smaller sizes, maybe for a web project, it’s easy enough to scale down individual forms or compositions using the transformation tools in your Image Editor. Experiment with your Editor’s layer alignment and distribution tools too. They can be a great help to you when composing and a real time saver.

POSITION & TRANSFORMATION: Once you’ve got a handle on controlling scale and opacity, you can begin to explore other variables like position, rotation, juxtaposition, symmetry, transformations, and color. That's where you can really start to have fun.
COLOR:
If you want to color the images or any designs you make with them, first convert the Greyscale files to RGB or CMYK. You can also cut and paste (or drag and drop) letterforms into a RGB or CMYK working document, where you can then freely apply colors.

LAYER STYLES & EFFECTS: Putting the characters onto their own layers in the way described above lets you take advantage of the 8 bit transparency that’s built into them. Because of this you can get some interesting things to happen when you combine different layers using blending modes or apply layer style effects.
For example, the "cast aluminum" effect on the "A" above was a completely happy accident that occurred just by playing around with simple metallic layer styles in Photoshop! Because the images have this transparency built into them, the various, subtle transparent to opaque "ins and outs" in the forms can produce unexpected results and suprises when using some effects.
Above all play & have fun. Find new combinations. Make cool stuff!
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