Enemies spawn periodically, they have letters on them. When an enemy is killed, that letter gets added to your word. You must form words from those letters.
Why it wasn't fun: Too random. Often times there were not enough vowels or common letters (even after adjusting letter frequencies) to form words easily, causing frustration.
Same as the 1st version in that enemies spawn with letters. Except this time, hitting (but not killing) an enemy increases the current letter value by one (it loops around if it's at Z), and killing an enemy increases your position in the word by one.
Why it wasn't fun: Too slow-paced. The player would often avoid groups and groups of enemies just to "wait out" for a certain letter. Also, stray shots often unintentionally messed up your current word.
3rd (and current) version
You start with a certain number of blank spaces (shown on the status bar).
Enemies spawn with words (not letters). Killing an enemy with a word of the required length (it must fit the blank spaces exactly) will give you points based on the rarity of letters in that word. In addition, some of the spaces have "stats" under them, these will increase your stats based on that letter's rarity. It sounds kinda confusing, but I have tested it and it's the best of the 3 versions I have so far.
Another screenshot of my progress: