That sounds like an interesting project, and something that kids will like.

Rainfall and winter temps can affect erosion, so it would help to know where you are located.

How much of a slope are you talking about? How high do you plan on raising the top of the bed?

What's on the other side of the top of the bed? If the ground is level and you raise one side of it, what will keep the top of the slope from falling onto whatever is beyond it? I think edging will be absolutely necessary at the top and sides.

I'm not sure how much slope you'll be able to achieve, even with edging (among other problems, the top of the bed will need more water, and the raised edges will be especially prone to drying out). One way to make the slope look higher than it actually is might be to trim the shrubs to different heights: the shrubs at the bottoms of the letters would be shorter, and those at the tops of the letters would be a few inches taller. (That's just a thought; I don't know if it would work.)

The best thing I know of to hold dirt in place is the roots of plants. One possibility to keep the background from washing away is to plant a very low groundcover in the non-letter areas. Ideally the groundcover should be a color that contrasts with the color of the shrubs that form the letters. There are many possibilities, but it depends what your climate is. If you don't know your USDA zone, you can enter your zip code here and find out:
http://www.garden.org/zipzone/index.php

Consider the groundcovers at this site (it's just a site I'm aware of that has pictures and useful information for a lot of low groundcovers). Here are pictures of all their plants:
http://www.stepables.com/1/Plants.html
This search lets you choose by height, zone, sun exposure, foliage/flower color, and other possibilities:
http://www.stepables.com/3/find_the_right_plant_for_your_area.html

How many letters will be in the sign, and what are the letters? If you've got any M's or W's, it could get interesting, especially if there are four letters -- and hopefully there aren't more than four letters -- though the junior highs I attended had 5- and 6-word names!

(I retired from a job where I made a jillion signs, both by hand and later with computers; I've also done needlework lettering on various strange projects. So this is bringing up a lot of memories....)

Thanks for all of the thoughts. Here are some answers to your questions.

Located in Richmond VA.
Just turf on the other side of the top of the bed.
Thinking gradual slope, but haven't really planned out how much.
Four letters - THES. Will be a lot of plants!

What kind of edging would you think that could be effective?

Thanks again for all the help!