Game Text with Alpha in GLSL Issues

So I am creating a HUD for my FPS game, and originally planned on using dynamic text. However, for some reason the text resolution looks horrible in the game engine (not sure why?) For example see picture below, the dynamic text is the upper left text. When I convert the text to mesh (the “G” was converted) it looks fine, but I obviously can’t change the text then.

So I switched over to using “Game Text” and am essentially using this method: http://www.youtube.com/watch?v=fvlAJRy4gg4

This involved using a font image texture, and setting the value with a variable… however, as you can see, the text in the upper right doesn’t appear to have alpha enabled… this works fine in multitexture, but I am running everything in GLSL, so it doesn’t work… is there a way to get this working in GLSL? Or better yet, is there a way to make the dynamic text look correct?