...once a live trace is performed it needs to be expanded to get at the individual elements...
...there is a expand button to perform this in the toolbar when the object is selected on the artboard...
...then in the layers palette you see a load of paths and compound paths probably...
...now you may also have white filled areas produced by the trace, to remove you can select one white fill and choose select > same > fill color, hit delete...
...in CS3 this step isn't required because there is a setting in the live trace to ignore white, i believe this option may or may not be in CS2, can't remember...
...with white areas removed you should be left with just black filled paths making up the text...
...to split them you need to use the knife tool, or the eraser tool, or the scissors tool, found above the hand magnify tool, click and hold on the eraser tool to see the other tools available, or press shift+E key...
...your best bet is the eraser tool with a small sized brush, you can reduce the size by pressing the [ or ] keys...
...then paint to chop the letters best you can, the second best method is the knife tool, but can be fiddly for curves...
...you can adjust the paths further if required using the direct select tool (white arrow) top right of the tool palette...
...this allows you to select anchor points of the path individually and move them around...
...to adjust a curve you need to use existing handles on the paths or create your own using the convert anchor point tool found under the pen tool options, left of the text tool in the tool bar...
...you can switch between the anchor tool, direct select tool and pen tool, by first selecting the pen tool from the tool bar, then press command/control for direct select...
...and simply press the alt/option key for the convert anchor tool...
...this saves you clicking back and forth, and much easier to work on the fly...
Andrew
