A number of people have asked me about how they could design or modify their own fonts, after being inspired by the design work they see in the fonts shown on my site. Many people have also been interested in having a way to turn their own printing or writing into a font , like all the Everyday Hand-printing fonts in the Script Font Identification Guide.
First of all you need to realize that font design is an art, and not something you can usually do in a hurry, unless the look you are after is sort of chaotic and undisciplined, like the Strange Script fonts. The font design tools are relatively complex and should be given lots of practice. You will need to learn about things like kerning pairs (spacing of specific letter combinations), if you get serious about a font to use for more than just a few headlines. Read the manuals!
Another thing you need to remember is that existing font designs are someone else's work and property, so make sure not to violate their rights to that design before you even think about using it as a starting point for a new design of your own. Many font suppliers grant certain rights, allowing you to modify their font outlines for your personal use, but most do not allow you to sell the modified font. Anyway, check your font license's small print before opening yourself up for a lawsuit by changing, and then trying to distribute, someone else's design with a new name.
The two principal full-featured Font design/editing programs I am familiar with are FontLab's "Fontographer" (formerly sold by Macromedia) and FontLab's "FontLab Studio". Both are available in Mac and PC (Windows) versions. Fontographer is full featured, but has a less complex range of capabilities, by comparison to FontLab Studio.
FontLab also has a wide variety of specialized, or less complex programs, such as "ScanFont" which allows you to create a font from anything you can scan, such as your own lettering; "TypeTool", which allows basic editing of a font, such as kerning adjustments and adding accents; NEW "TransType Pro" that allows converting fonts from Mac to PC, and TT to T1 formats and converting all font formats to the platform-independent OpenType font format (you can upgrade from the basic TransType, which did not have the OpenType capability); and "BitFonter" to allow full editing of bitmap fonts for many different platforms, including Palm, HP and BDF.
I am not very experienced with these tools, having only done some minor editing to tweak font characteristics, and conversion of formats, so I cannot speak much about the tools, except to say that I know they are widely used and considered the leading commercial products for font design and editing.