I'm very glad I found this thread, as it helped me decide what bits I would purchase to create these style (stacked text) of signs, plus other fine engraving projects I had in my head. I didn't really think about using a flat-bottomed cutter before (I saw sign making v-groove bits, but their flat spot is 3/16", which is WAY too big for this purpose, and I hated the look of the grooves after using a standard v-groove (60 or 90 degree) bit and I spent too much time/effort cleaning up around the lettering.
I decided to go with the Amana In-Groove line of insert cutter/blades: (link)
It is VERY hard to find these things in Canada, and while I was at the ToolsToday website, I got an offer I couldn't refuse: free shipping to Canada (which is fairly rare in my experience) and 10% off the total order (first time Canadian customer).
The price of the replacement blades is a little steep (~$22 each), but I figured that in the long run, it will be cheaper than buying individual bits. I bought the 8 piece set (the shank body plus a number of different blades) with a few extra blades in the size recommended by other posters above (60 degree, .03 inch tip width). I can imagine these blades will be even more fragile than the bits mentioned in threads above, so I will have to be VERY careful when using my touchplate and making sure I don't bite off more than they can chew (feedrate and/or pass depth).
I just ordered them, so I can't speak as to their quality/performance, but I thought it might help others decide on the correct tool for the job at hand.