A lot of image applications include a Mosaic filter which lets you do that.
There are also some freeware plugins that do that. Nice ones can be found at http://www.illustrator.ru/catalog/softw ... ex_e.shtml
However, I haven't seen tools so far that places a letter on these tiles. So you will probably have to do that manually.
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There are several plug-ins that will convert the color into a letter leaving a black background. One is from the FF Galleries but I don't remember which one it is (or even if it is from the FF Galleries, all I know is that it comes with many other filters... maybe Unplugged) and the other one is Panopticum's Digitalizer (which is shareware).
What you could do is work with two layers: the first one you create the squares and on the other one you create the letters and remove the black background (there's a filter for removing black to, called Remove Black, but I don't have the url for it).
Hope this helps even if I couldn't give you any urls (although I think you could find them in the Resources page from T.P.S.).
What you could do is work with two layers: the first one you create the squares and on the other one you create the letters and remove the black background (there's a filter for removing black to, called Remove Black, but I don't have the url for it).
Hope this helps even if I couldn't give you any urls (although I think you could find them in the Resources page from T.P.S.).