There is only one file type that uses the .LETTER extension:
Undeliverable Mail File
File named dead.letter that is sometimes created on Unix-based systems when email cannot be sent; may be created because the destination address is wrong or because the recipient refuses to accept the email.
The dead.letter files can be deleted safely. However, if there are further problems sending mail, then the file may be recreated. Therefore, you may have to investigate further to locate why the mail is not being sent.
NOTE: The dead.letter file can be created by the Unix sendmail program. Also, it is sometimes created when invoking the sendmail program with the PHP mail() function.
Updated: August 27, 2011