hmmm, looks like I didn't attach link to pic correctly.
I did end up making the smaller letters solid, just made sense to do it since it was going to be so small. Thanks for the input -I will suggest 2 colors when I hear back from the customer.Since it is embroidery I think either one will be fine ... but it will be fairly difficult to hold all the detail that is in the smaller letters - The smaller letters would sew out better if they were solid.
Also to make the background stand out from the words more I would have the design be two colors. In embroidery it doesn't matter as much about how many colors the design is. It is more important to keep the stitch count down ... less detail = less stitch count.