I did the exact same thing 10+ years ago as a newbie. Congrats on that machine, it is a great machine and will be a work horse for you for a long time. (As a side note, embroiderers tend to keep their embroidery machines rather than trade or sell them.) I traded mine and eventually bought a new one because I needed a back up and I knew, for the price, you cannot beat this machine!!!
You can look at my blog that addresses this issue.
Fonts are for short words or monogramming. Lettering (these two words are used interchangeably, so you need to know what you are looking at) is for writing words, phrases or sentences. Look at this AlphabetXpress to do words and sayings - http://www.annthegran.co...spx?t=1&i=6585 Then look here at letters - http://www.annthegran.co...t&ssp=/2/2/1/0 The usual difference is two things, one says you need software (words) and one does not need software (letters). They are always different prices, usually a lot of difference.
Getting back to your question, on your screen, you need to enter the letters one at a time. Turn on the 'grid' and watch the exact placement as shown on that screen. It is tedious but can be fun for just a name, like Pat or Jim - not as much fun for Patricia or Josephine.
For the time being, I suggest you use this service - http://www.annthegran.co...ring&ssp=/2/14 Until you are more knowledgeable, you should not buy software because of the cost. I know many people who bought different software that did not work for their needs - wasted money is not a good thing.
When you are more versed, I highly recommend AlphabetXpress and you can get a 30 day trial. It is inexpensive and can be on sale from time to time. It is user friendly, and NOT MANY of them are user friendly. I tried four classes for one software but still cannot do what I need. Going to classes will help a great deal.
Lastly, I do recomment that you do the example for your PE770. While it is for PE700, the information is very much the same. Yours just has some other bells and whistles that are not on the PE700. In fact, the PE770 is actually cheaper than the original PE700 was - given the rate of inflation, etc.
Ask questions, read what interessts you and check the forum often. There is much to learn Jedi!
Here is one of my items from my sales site.
This is Waltz which comes with AlphaX and very popular with brides.
Pat, The Avid Embroiderer