@DiscoStu:
I think that's a very generous offer from Mike, and having tried quite a lot of lettering with the scroll saw myself I think you're very wise to take him up on his offer - especially as your work will be a pressie, you have a guarantee that the lettering will look very good ("deep & crisp & even") without all the hassle and practice time to produce what will almost certainly be inferior results on the scroll saw (NO disrespect to your own skills).
Re "Mod Podge". I also belong to a toymakers forum in the US and for the simpler, younger kiddies' toys, they've recently started selling plans together with down-loadable .pdf files in full colour which allow you to print out sides, etc and apply them to the toys without painting them. Apparently you apply the printed out coloured bits and pieces with this "Mod Podge" stuff, then when dried, protect the printed paper surface with a water-based acrylic clear varnish.
I've looked for this Mod Podge stuff here (no luck so far) but from the description on their web site, it appears (I repeat, only "it appears") to be something similar to a somewhat thicker version of ordinary PVA wood adhesive - but I could easily be wrong.
As I haven't bought any of their plans with this feature included, I haven't got any further with the idea so far, but I guess (repeat, just "guess") it would work OK with ordinary PVA provided you waited long enough for the ink on the ink jet printout to really dry off (not necessary with laser printers I also guess, because that process involves heating the paper to bind the toner powder anyway).
The above is all a bit "iffy" I know, but sorry I haven't tried it myself - yet.
Here's a link to their web site. If you search around you'll find at least one description of the whole "Mod Podging" process on the site. They have a Forum too, and like here, it costs nothing to register.
HTH
www toymakingplans com
AES