Quick update on this: we've now rewritten the font drawing system once again for Beta 3, and the speed difference is enormous; the blitter (code which actually draws the character bitmap on the screen) is running about 10-20x faster. This is more a reflection of the terrible state of the old blitter than our brilliant programming skills, but regardless it translates to an overall speed improvement of 3-4x in typical font drawing operations. So it should feel much much smoother now.
(these are all benchmarks from an emulated system with no graphics acceleration, but because of the nature of the changes the difference may actually be greater running on real hardware (which we're going to be testing it on soon))