I found this awesome idea for letter blocks at K is for Kindergarten. Take a set of larger blocks and add letters to them. I used sticky labels.
You can stack the letter blocks to make words, put them in alphabetical order, or use them to spell your name.
On the wider blocks, I added words. You could match up the smaller letter blocks to these to make the word, use the word blocks to make sentences, or play a matching game. So many possibilities!