I have an old house that we just moved into. The handle for the hot water shower is stripped. When I tried to put a new one on the stem coming out of the wall was stripped. I have access to the back of the handle but not sure how to disassemble/assemble new stem and handle. Any help?

usually the stem will screw out with a socket.
i have a set of plumbers sockets and i have also used a regular socket and turn it with pliers because the end of the stem is up to the socket hole.
then take the stem with you to a plumbing shop(not home depot)for replacement and a new handle.
do the cold and the diverter(if it has one) at this time also.
you'll thank yourself later.

You'll have to reach two fittings thru the surround .....the first tightens packing aound the stemm........the secound larger nut holds the stem to the valve body.......use the hollow plumbing wrenches to remove.....

Here's a typical setup:

http://www.terrylove.com/pp_3.htm

"...measure once.....cut twice....throw that one away and cut a new one...."

If the parts are really stripped and the socket tool does not work then you can open the wall a little more and use a basin wrench to remove the nut just behind the packing gland BUT open the valve half way as not to bind it from removing.. Make sure all water is off