It depends on what your texture looks like. Is it compressed? If it is, there should be a warning in the font saying that your font is going to look bad and you should change it to truecolor / 16bit.
You can work out whats going on by creating a box, and then dragging your font texture to it. If its the texture, then it'll look bad in there too. And if it is the texture, you should fix it as mentioned above, either manually or through the font interface.