"S" is probably for Slayer. The "SS" (on the 12th fret) does seem to have a Nazi connotation.
Hanneman is a big time collector of Nazi memerabilia. Almost all of Slayer's songs dealing with warfare come from here.
I think it's odd that he's so into Nazism when he doesn't appear to share any of their racist beliefs. He's in a band with two Latin American emigrees (Vocalist/Bassist Tom Araya is from Chile and drummer Dave Lombardo is from Cuba) and he's friends with, was in a band with ex-Suicidal Tendencies guitarist Rocky George (the band never released anything, but Slayer recorded one of their songs, Drunk Drivers Against Mad Mothers, for the Undisputed Attitude disc. Rocky, for those who don't know, is very, very Black).
I dunno, it's just weird.
I think the guitar itself is kickass, like the perfect metal guitar. But I think the old Eagle inlays were way cooler. I'd feel like a total tool playing a guitar with "SS" inlays.