If I wanted to make bubbly letters like this

http://sphotos-a.xx.fbcdn.net/hphotos-p ... 6108_n.jpg

where the direction would follow a spline arc and the middle of the letter comes out and the top and bottom tuck in like the edge of a circle. I'll try and sketch it out and post later to help.

close to this http://wakpaper.com/large/Graffiti_wallpapers_367.jpg

What tools would I used for letters following a horizontal arc or spline?

With the pen tool you can trace everything, and use the node editor tool to put things in position.
It can take at least 2-3 more times of graffiti drawing time in vector than in raster format.
-My guess is that blaze piece would took 5 hours to make it look all polished.
Which polished look, is by the way rejected by most graffiti writers stick to paper and wall.-

Your 2nd JPG is timing out, for me, at the moment

So I can't do it with tools in vector?

I'm trying to make a logo for a kid game site with letters, so I was hoping I could do it with inkscape in vector form.

Hi.

So I can't do it with tools in vector?

Of course you can! The sky is (not) the limit!
See some of these;
http://www.artjunks.com/create-a-graffiti-in-inkscape-tutorial/
http://www.ehow.com/how_6006523_draw-graffiti-inkscape.html
http://applikas.blogspot.com/2012/10/create-graffiti-in-inkscape.html
http://streetfiles.org/tags/inkscape/
http://desmovalvo.deviantart.com/art/Graffiti-Experiment-with-The-Gimp-and-Inkscape-322855938
http://dillerkind.deviantart.com/art/Inkscape-287852296
http://www.taringa.net/posts/imagenes/15961068/Tag-Graffiti-Inkscape-Photoshop.html
http://abstract-calligraphy.blogspot.com/2011/01/abstract-graffiti-luna-maya.html

Post images of your work!
Good Luck
RGDS
Raganar

You can create graffiti with inkscape but making it look authentic is difficult.

This won't make bubbly letters but
http://svg-wow.org/graffitis/graffitis.xhtml
will turn GML (graffiti markup language) into SVG.