It's working fine for me.
There are no letters in the item codes, only in the logout password.
If the generator itself does not work, it can be because:
-The TamaTown official site is down (it's rare but it can happen).
-The webhost where the script is running is down (it's a free host so it can happen).
In either case, try again a while later.
If an item code does not work, it can be because:
-You mistyped your password in the generator.
-You mistyped the item password in the tama.
-Your tama does not yet meet the conditions to get that item.
Make sure your passwords are written correctly, and that you input them in the right menu on your tama.
Also, check if your tama can really get the item you want (Is it old enough? Second / third generation at least? Donated enough points? and so on).