Edit: FTBlender used to be the only readily available method of making bitmap fonts for the BGE. However, ashsid has written a Python script which gives much better results. I recommend you use it instead.
Find it here:
http://www.ashsid.sk/wp/?p=21&lang=en-us
Thread here:
http://blenderartists.org/forum/showthread.php?t=114069
Original Post:
Blender uses special bitmap font textures for realtime text, and these textures can only be generated with a program called FTBlender. I thought I’d throw together a quick tut on making font textures with ftblender. I’ve also got a windows version of ftblender available for download on my site (link in the tutorial).
http://www.blendenzo.com/tutFTBlender.html
Cross-Platform Support?: Apparently ftblender was originally written in Free-BSD, and the source was generally available. That was years ago, though, and I can’t find it anymore. Anybody have a copy or know where I can find it?