Knead the fondant well before you start shaping anything. Keep teh fondant you are not using at the moment well covered. And also I use Crisco on my hands that gives a nice finish and it wont dry out as easy.
As a newbie to MMF (so take my advice as you will 
), I've found that I have an easier time with fondant when I microwave it for 4-5 seconds at a time until it is a little softer. Kneading in a tiny bit of Crisco into it can help with some cracking too.
I've also read here on CC that if you're using cornstarch to prevent sticking, powdered sugar can actually be a bit better to use because it tends to help heal cracks.
I make this type of lettering a lot and I know that since the "snakes" are thin and small that they dry out quickly. First knead your fondant till really smooth and pliable, using crisco on your hands. It will almost get shiny looking. At this time, on a board/pad that's also been smeared very lightly with crisco, roll out your snakes, form your letters/numbers and then set aside to dry. This is especially important if you had added tylose to your fondant before kneading and if the fondant is colored...both of those items will dry out your fondant. The rule of thumb is, if it's cracking, add crisco and if it's sticky add powdered sugar. HTH!
I would love to know what kind of lettering you are talking about... I'm intrigued!
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