I bought these wooden letters at Jo-Anns and used my favorite craft accessory . . . mod podge . . . to apply the scrapbook paper to the fronts.
After they are dry enought that the paper doesn't slide around on the letter, use sandpaper to scuff and antique the edges of the paper. Once you're satisified with the look, paint a coat of modpodge on top of the letters to seal the paper.
Once it's all dry, add embellishments. I used fake snow, wooden snowflakes and ribbon.
I've also done words like this for Halloween and Easter so far. I love to put them on my fireplace mantle (or somewhere higher up so that my toddler can't pull them down to chew on them).