Merriam-Webster's Word of the Day for March 13, 2010 is:

acronym • \AK-ruh-nim\  • noun
: a word formed from the beginning letter or letters of each or most of the parts of a compound term; also : an abbreviation formed from initial letters

Example sentence:
The new committee spent a fair amount of time choosing a name that would lend itself to an appealing acronym.

Did you know?
"Acronym" was created by combining "acr-" ("beginning") with "-onym," ("name" or "word"). You may recognize "-onym" in other familiar English words such as "pseudonym" and "synonym." English speakers borrowed "-onym" directly from the Greek (it derives from "onyma," the Greek word for "name"). "Acr-" is also from Greek, but it made a side trip through Middle French on its way to English. When "acronym" first entered English, some usage commentators decreed that it should refer to combinations of initial letters that were pronounced as if they were whole words (such as "radar" or "scuba"), differentiated from an "initialism," which is spoken by pronouncing the component letters (as "FBI" and "CEO"). These days, however, that distinction is largely lost, and "acronym" is a common label for both types of abbreviation.