ALPHABETA
The most important writing systems in historical Hermetic magic are Egyptian (hieroglyphic, hieratic and demotic), Greek and Coptic. In later Hermetic magic, Semitic writing also became important. The Greek alphabeta is especially important, as it is one of the few that included vowel sounds. The same writing system is frequently used for many different language systems.
Egyptian hieroglyphics (priestly writing) is carved or painted on stone. Egyptian hieratic (priestly), an abbreviated version of hieroglyphics, and Egyptian demotic, an even more abbreviated version of hieroglyphics, are for writing with ink on papyrus. We can never know for sure how these writings were pronounced since no vowels were represented (they were considered to have too much power).
The Greek alphabeta had symbols for every sound and words were spelled just as they sounded. This means we can pronounce words exactly as they were in ancient times and, in the ancient magical papyri, Egyptian and Hebrew words were written in Greek letters. The Coptic language is a dialect of Egyptian. The Coptic alphabeta is a modified version of Greek (therefore it includes vowels).
Many of the ancient cultures believed that the letters of the alphabet were the essential elements (stoicheia) of the universe. We perform letter and word magic by manipulating the four aspects of the letters of the alphabet: number, shape, sound and meaning.
NUMBER
Science has known for some time that knowledge of the numbers related to something (size, weight, velocity, etc.) allows you to manipulate it. Mages throughout history have known this as well, only the numbers and manipulations are different. Etheric bodies are manipulated by adding the numeric values of the letters of their true name then renaming or associating them to names with other numeric values. Many different spellings (and associated numerical values) of Greek words can be found through different dialects and different usage. In example, a priest (iereas 321) and a priestess (iereia 131) are essentially the same thing with different gender and numerical value. Carefully choosing words for spells or talisman can change the energies and meaning drastically.
Words have an association with any other words that have the same numeric value (or differ by no more than one). In example, there is magic (magia) in books (biblia) since they both add to 55. Words that have the same letters in a different order have a negative association. Thus, seawater (alme) can be used to remove the courage or will (lema) of evil spirits and drive them away or control them. Palindromes, such as father (atta), are especially powerful since they are the same when read forward or backward.
SHAPE
The shape of single words or letters, and the shape of writing, adds power to magic. An example of the importance of the shape of a letter is a capital upsilon (Y). This symbolizes a three way crossroads (sacred to Hekate) or the two paths resulting from a decision. Some magical words, such as ABLANATHANALBA, have been created just for their shape. This word represents the association of the moon with Aries, Cancer, and Virgo balanced in the either. Writing words into spirals, triangles, diamonds and other shapes are other ways to add power to a spell. The most common of these shapes is called the wing formation. A word or phrase is written then repeated on the next line without the first letter. This is repeated until there are no letters left. The purpose is to cause something to diminish as the phrase diminishes. The most famous of these wing formations is formed from the magical word abracadabra.
abracadabra
bracadabra
racadabra
acadabra
cadabra
adabra
dabra
abra
bra
ra
a
SOUND
Modern quantum physics has determined that all matter is made up of wave energy, therefore, the mages' use of sound to effect this wave energy has at least entered the realm of what's possible to scientific theory. Along with the magical effect of vibrating common words and phrases, some magical words are used only for their sounds (some of them are quite lengthy).
Words that are used for their sound value are sometimes written on a talisman but, to get the full effect, they are "vibrated" as well. Vibrating a word is prolonging the sound using deep tones so you can feel the vibrations as you speak. This has a powerful effect on the surrounding environment and on several planes.
MEANING
By far, the most important aspect of letters is their meaning. All alphabets were originally pictographic and each letter retains some meaning from these pictures. Letters have also been associated with elements, planets and zodiac signs and get meaning from this association as well.
The seven vowels (in the order of the alphabet) are associated with the seven planets (in order of distance from earth): alpha with the moon, epsilon with mercury, eta with Venus, iota with the sun, omicron with Mars, upsilon with Jupiter, and omega with Saturn. (Many cultures used this same order of the planets including Hebrew, Greek and Roman.) The words for the five elements use only five consonants so those consonants are associated with the elements: gamma with earth (Ge), delta with water (hydor), theta with ether (ether), pi with fire (pyr) and rho with air (aither). The remaining letters are associated with the signs of the zodiac: beta with Aries, zeta with Taurus, kappa with Gemini, lambda with Cancer, mu with Leo, nu with Virgo, xi with Libra, sigma with Scorpio, tau with Sagittarius, phi with Capricorn, chi with Aquarius and psi with Pisces.
The pictograph for alpha comes from the symbol for an ox head and oxen were used as a sign of wealth, so alpha has the meaning of wealth. As the first letter, it has the meaning of the source of things and is associated with Zeus as ruler of the gods.
As the second letter of the alphabet, beta represents duality in all of its forms. As the first letter of basileos (king) and basilissa (queen), it is an abbreviation for king or queen and represents royalty.
Gamma, as the third letter, represents all of the triple goddess forms (such as the Moirai and the Charities), the three phases of the moon (waxing, waning and full) and three-way crossroads and, therefore, Hekate.
The forth letter, delta, is associated with the four elements and the Pythagorean tetraktys. Delta being the first letter of ten (deka) and its triangular form resembling the shape of the ten dots of the tetraktys, delta is associated with the number ten. Its origin is the pictogram for door, so the triangular shape symbolizes doors and the female pudenda. Being associated with doors (and people leaving or arriving), delta is also associated with Hermes as god of travelers.
Epsilon's shape appears to be a theta cut down the middle so it is associated with half. It also resembles the shape of a beam scale so it is associated with the scales of justice and justice itself. Being placed above the door of the temple of Delphi, causes epsilon to be associated with Apollon. Being the fifth letter associates it with the fifth element (ether) and the pentagram (referred to as the password of Pythagoras).
Zeta is the first letter of life (zoe) and the next four characters spell live (zethi). As the seventh letter, it is associated with the planets as a group.
Theta was originally written as a cross (or X) within a circle. A cross within a circle is made of three of the oldest symbols: a horizontal line (representing everything mortal and of the earth), a vertical line (representing everything immortal and of the heavens) and a circle (which is all encompassing). Combining these meanings, the early form of theta is associated with the universe. Later, the cross within the circle was replaced with a short line or a dot. This is representative of the earth encircled by the world snake (good spirit or agathos daimon). As it starts the word thanatos (death), it is frequently associated with death.
Iota is the smallest and simplest letter so it is associated with things that are insignificant. When the value of the numbers are added together they equal 1111. This is called the repeating monad and associates iota with the source of all things. The shape of iota associates it with the phallus.
Kappa is sometimes used for an abbreviation of lord (kurios).
Lambda is used for a representation for numerical progression. (The ancients used a diagram in the shape of a lambda to illustrate twice and thrice. On the left arm are 1,2,4,8 and on the right arm are 1,3,9,27.)
Mu originated in the Egyptian symbol for water (similar to the modern symbol for Aquarius). With alpha as beginning and omega as the end, mu represents the middle (meson). Seven mu's together are used as the moaning sound of ghosts and is used in conjurations.
Xi is rarely used in magic to represent Zeus (due to a local dialect). Tau represents the phallus and was associated with the cross, which was used for crucifixion by the Assyrians and later adopted by the Romans. As I mentioned above, upsilon is a symbol of a moral choice due to its shape.
When the arms of chi have four small circles attached to the ends of the arms, it represents the creation of the universe and, therefore, creation in general. Chi (and sometimes chi-rho) is used to symbolize Chronos (and later Christ).
Psi is associated with the psyche and, later by the Christians and Gnostics, with the Holy Spirit (Pneuma Hagion).
CONCLUSION
As an example of how all of this fits together, I'll suggest an analysis of the stele of Aphrodite as shown in "The Greek Magical Papyri in Translation". On the left side, reading bottom to top, is a stick figure, which I believe symbolizes the person that wears the amulet. Above that is the Chi with a circle on each arm and above that is another stick figure, this one holding a wand. I believe these three figures represent a mage creating something for a client. Above the mage are a gamma and a beta. I take this to mean the client wants a choice of royal persons (after all, if your going to wish, you might as well wish big).
On the right hand side reading top to bottom, is "pop" (fire surrounding the universe), a magical character the Hebrews associated with communion, and "py" (retaining some of the fire and providing support). My interpretation is the client wants the fiery passion of an Immortal to combine with them, retaining just enough passion so they don't get burned and giving support in the future.
In the middle is "Damnameneus" (the spirit that will cause the results to take place) and "Akrammachamarei" (a vibrational word used to power or charge the amulet). Finally, at the top is "ro" representing a wise Immortal watching over the operation to ensure the client only receives what is good for them.
Granted the above is only my interpreted and I could be wrong. However, I do know this amulet works and this analysis is a rational explanation of how it works.