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Second, lets return to fonts.
The article you cited was old, but its relevant and basically you mixed up bitmaps and textures.
There are two main types of font - "bitmap fonts" and "vector fonts" (truetype are vector).
The bitmap fonts (WGL fonts) they pick on in that Nehe tutorial are monochrome and they observe that they look bad because of that. That's because the bitmap fonts have no alpha, not because they are bitmapped, if you can see the distinction.
You can't use vector fonts directly in OpenGL. You have to render them to a texture - with alpha - and then draw quads with them on it. So you have to rasterise your vector font to actually draw it. So to use a vector font you have to turn it into a bitmap font, and you want to have alpha when you do so.
The tutorial code went linking against freetype and doing rasterising of glyphs from real fonts on demand and caching the glyphs. I imagine GLEST/GAE/MG does exactly this, as they use my fonts on linux and get the sizes completely wrong (there have been work-arounds specifying general scaling for fonts in the INI but it's not the best fix). You can see that this means you are deferring size and weight and other properties to runtime so this can give lots of control if you want. Its a very 'proper' approach.
The tutorial code goes making individual textures for each glyph. Think about that...
It is perhaps more common to pre-rasterise the font however - create the bitmap font (with alpha). I linked to the definitive tool for doing just that, and my code that reads the font files it produces. This approach you typically get a single tga for all glyphs, tightly packed, so you can then actually turn your text into a list of quads and texture coords and draw it in a single op.
The ultimate answer is of course to have it all - doing your rasterisation on demand, but rasterising US-ASCII printables early on, and doing dynamic packing of new glyphs into a texture that you update on the fly so as to avoid having a gazillion small textures floating about. This is tedious code to get right, hence me suggesting sticking with pre-rasterised fonts. You can happily include the few thousand glyphs for various oriental languages and such and still only be using 3 or 5 MB of texture...
Once you have the font rasterised you can do cool things that you see in game text but not on normal word-processing applications - you can use the font bitmap as an alpha channel whilst drawing the font using another texture to get different colours for the actual text e.g. a rainbow pattern is common. Or you can actually have illustrations for the characters, with different colours - a nice bitmapped glest font with the yellow outline and the silver innards would be very pleasing.
Edit by Omega: See below.
