Well I'm not done looking into text related rendering but I can at least discuss the basics to begin with.
The majority of text rendering on the 2600 is Player object based or to be more specific heavy multiplexing of Player0 & Player1 and the application of what is called the Venetian Blind display kernel. So its fair to say you're looking at a very prerendered setup for text display like single words, 2X1 letter clusters, and tile constructed fonts.
The Venetian blind methods primary element in function is the memory nybble that exists in the 2 Player objects which have an upper and lower nybble for every 4 bits wide. Basically it shifts both 4 bit wide segments of the Player object up & down per scanline with some flicker, it has the benefit of being fast to render but also that even with flicker it keeps a solid consistent appearance. The main drawback of this is that a 1-line render will look like a 2 line-render or losing half your visible height resolution despite the benefits.
Also this method has a higher cycle cost than a normal display kernel so those costs have to be considered. How much cycle cost really depends on the design of the game you intend but one thing is certain is that you should really decide upon a maximum character amount as the more you push for more characters the less you can do overall in terms of effects and other display trimmings.
Here's a neat kernel that managed 32 characters with a 3 pixel wide font at 2 characters per Player object. That's the big thing to get the maximum number of characters to display.
http://www.atariage.com/forums/topic/180632-32-character-text-display/page__st__25I've been aiming for less characters but larger character fonts for better legibility but no one seems to interested in that yet. Mostly I've been pursuing what I would call the standardized CRT to text approach which is best described in this article. I can't see the images in the page but maybe you can.
http://www.gamasutra.com/view/feature/130498/crossplatform_user_interface_.php?print=1I subscribe to the standards set in this article when it comes to retro gaming as we went through many games with fancy fonts that were hard to read on our game consoles over the years. I was actually quite pleased when I started seeing DS games with big letters that compensated for the distance I hold the unit away from myself and I feel the same way about font to CRT clarity issues.
*Actually that issue with Dead Rising on a SD-TV being unreadable is inexcusable since the level of memory and HUD to font scale options possible today allow not just SD support but also help for people with varying levels of eyesight quality. I don't want to rant but for crying out loud don't neglect the deaf or people with poor eyesight who play video games ijs.
Format:
Its not too difficult to produce content at this standard as you just use a 1:1 pixel unit to compose the image, strip out every second horizontal line, and then offset 50% of the width either up or down the for every Player object sprite block.
I mention 1-line kernel rendering that looks like 2-line but this also progresses lower as well with 2-line rendering looking like 4-line rendering which is what I'd consider the limit of this technique except for large screen filling text or a coarse resolution bitmap.
Now this halving of the vertical resolution is not default since you can actually use the venetian blind rendering with 1-line rendering which people have applied to game sprites, its mostly that in large doses of sprite multiplexing the skipping of lines helps overall with timing and CPU demands of pushing beyond 2 Player objects. So if you were doing a 1 on 1 competitive game 2 sprites with 1-line venetian blind rendering would be mostly practical while a sports game with teams of players or in the case of text with its multiple characters would more the likely need to skip lines or even thicken the scanlines to cope.
For a little background on this here's an interview with the inventor of Venetian Blind rendering.
http://www.digitpress.com/library/interviews/interview_bob_whitehead.html