Anyways, back to the topic.. -.-
I really like the first one. The S is a little hard to read, but it makes it look better. The graphic looks like it moves around a lot (not literally the graphic) and I think the letters make it flow better.
I feel that if the letters were anymore clear it would jump out too much. And instead of seeing the Elf right as you look at it, you would see the name. And with a background like that, you don't want that. But, if it was more like mine, to where the background isn't anything spactacular, then it would be better if the letters where more readable. So keep it how it is.
9/10 For your first one, 7/10 for your second one. #1 = Sexy