All it seems to do is create two 2d letters when I attempt to extrude.
Have you tried changing the extrude manipulator from local to global? Click the little blue Q circle thing.
Try extrude command (do not use the manipulators) and then press W to switch to move manipulator and pull it along the Z axis.
I'm in the process of extruding letters from 2d polygon surfaces. Sometimes it doesn't work properly and rather than be a proper extrusion along the z axis the edges end up all jacked up and the extrusion is lopsided. Is there a way to properly extrude only in the z axis?