I think I have it fixed now. The issue was two-fold: Direct3D was using nearest neighbor texture sampling, and I didn't have the -0.5 adjustment in the vertex position to align texels with pixels. So far I have tested it on my nVidia 7150 and my laptop which has an ATI Mobility Radeon X600 and it works well on both.

I have made a Font tester application (linked below). I'd like to hear if anyone can test this out on other video cards to let me know whether or not things are actually working the way they should be. It's for Windows only, at the moment.

Download the Font Creator.

If you are using AgateLib 0.2.5 I have compiled a replacement for AgateMDX.dll which has this fix added. Source is available in SVN (under release-0.2.5 branch).

Download the fixed AgateMDX.dll file.

I have also applied this fix to BallBuster.net.

If anyone tests these out, please let me know how it works.