I used vinyl letters. Took about 30 minutes to install after I removed the old lettering, cleaned, and polished the bottom of the inflatable. I've seen no indication of wear in the two years since I installed them.
I had the lettering made by Prism Graphics in Seattle so it was just two strips that needed to be applied. Not individual letters (which I would never have been able to get right).
The previous lettering had been on the boat for about six years. There was nothing wrong with them either. Just needed to change the boat name and home port.