I can answer your questions. It's going to be little long.
The Personal Cricut cuts at 6x12.
I don't think it's a waste of money but I am a power Cricut user. I am one of those Cricut girls, lol. No, seriously I have been using the Cricut since the first day it came out.
I do buy cartridges. I own a lot of cartridges. Granted, I have been collecting them for over four years. I also got many free over the years too with promotions, reward points, etc...
For you I would recommend SureCutsAlot or MaketheCut software. SureCutsAlot (SCAL) is on sale at SVGCuts.com for around $40 this Black Friday. Both of these programs will cut any font or shape you can find on the Internet. It's very easy to do with their automatic tracing programs. With the fonts all you need to do is open a text box, type in what you want & your good to go. Both programs have great forums. They both come with free trials so you can get a feel of which one you love the most.
I use both programs for different reasons. I think you would like either one of those programs better since all you want is lettering. Cricut Font cartridges tend to be pretty limiting. Then you need to buy the Gypsy or Design Studio to really work with your lettering.
Yes, the Cricut can cut Contact paper. This is a very popular technique with Cricut girls and guys. Lots of T-shirts and stencils are made this way.
Waxed Paper, Sticker Paper, Chipboard, Acetate. Go to AboveRubiesStudio and download their chart for all the materials you can cut with the Cricut. Trust me most Cricut owner have tried every material out there. The Cricut cuts fabric like a dream. Of course vinyl is the most popular right now.
The Cricut does not cut felt or nubby type material. It clogs up the housing.
Any questions just throw my way.
There is an unadvertised sale on the Cricut's at Michael's and JoAnn's. They will be running at $59.99 for Black Friday. This is a killer deal. I paid $300 for my original Cricut when it first came out.
It was worth every dime.