To design your monogram in Microsoft Word: Choose Insert -> Textbox. Type and format the letter the way you like it. Do this three times. Now click on all textboxes and choose Format->Textbox. Choose Color: No Fill (so you can overlap letters) and Line: No Line. Select all letters, right click, and choose Group to lock in the arrangement. You can now copy your image into Microsoft Paint and save in several formats, such as JPEG.
Monogram design in PowerPoint: You'll want to use 'Word Art' to create your letters. Click on the blue tilted 'A' on the bottom toolbar for each letter. Format them to your liking. When you're done designing, select all the letters, right-click, and choose Grouping->Group. Now you can click on your image and right-click for Save as Image. PowerPoint lets you save directly in formats like JPEG, PNG and TIFF.
For Fonts:(download for free) www.dafont.com
To help save the monogram image into a jpeg,www.snagit.com There is a trial version and you can download since word at times may not save into a jpeg.