Let me start by saying I HIGHLY recommend doing a trial run on an old glass or jar. This will help you get an idea what you want it to look like and work out any design details before using the gift glasses. I tested out etching the actual letter by using the outline of the sticker as my guide, and then also using the sticker as my blank space and taping off a square around the letter to be etched. I ended up going with the etched square look, totally a personal preference, I just liked the look of it better on the glass.
Have your ever done any glass etching? What did you do and were you happy with the results?