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Do you have a CRT or flat-screen (LCD, etc.) monitor?
Flat-screens are notoriously horrible at anything other than their native resolution, and may be losing your text as a result. They just don't know what to do with half a pixel.
Changing the system font is usually a matter of changing the default theme or color scheme (options can be found in Display Properties). If you have one of the high-contrast ones selected, that might in some way be the issue.
update: I just took another look at the screenshot. There's something HIGHLY funky about that font. It looks for all the world like some flavor of courier, possibly the non-resizeable system variety. I'd investigate just what font that's using, and why, and install whatever it thinks it should have that it's substituting that for.
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