The methods used by various operating systems to render type vary widely, even through generations of the same OS. Methods which had worked successfully on CRT (cathode ray tube) displays had to be adapted as users moved to LCD (Liquid Crystal) displays. Aliased type (monochrome 'jaggy' text) gave way to grayscale anti-aliased (smoothed) text which then gave way to sub-pixel (using the red blue and green sub-pixels) rendered text.
The two main operating systems take fundamentally different approaches to type rendering. Windows systems sacrifice font metrics (the shapes of the letters as intended by the designer) to preserve sharpness and pixel-grid alignment. OS X, on the other hand preserves font metrics at the expense of legibility at smaller sizes, typically below 10px.
Compare the letter pairs b, e, l and t in the figure above (click to enlarge). On OS X, each letter is different while on Windows XP each pair is identical. On Windows 7 there is a slight variance in the anti-aliasing, but the underlying font metrics are identical.
Versions of Windows up until Vista (2000, XP) used whole pixel positioning to display their fonts via bi-level rendering (monochrome, aliased), font smoothing (grayscale, anti-aliased) or GDI ClearType (sub-pixel rendering, horizontal only, anti-aliased). Whole pixel positioning aligns the letters to the pixel grid, producing crisp text, but sacrificing font metrics (the stylistic shape of the type as intended by the type designer). ClearType, the superior method on LCD displays, was disabled by default on XP as it didn't perform well on CRT displays.
Close up, displaying the red, green and blue sub-pixels.
Fonts need to be hinted to display well with ClearType. Hinting works reasonably well on LCD displays at their native resolutions, but can make text display considerably worse at non-native resolutions (producing blurry colour fringing) as sub-pixel values are no longer valid.
Note: Unlike TrueType fonts, Postscript fonts do not support hinting and consequently their display on the pre-Vista systems is particularly poor.
Since the release of Windows Vista in 2005, it and subsequent releases have replaced GDI with DirectWrite which improves the rendering of both TrueType and OpenType fonts (which are often not hinted). DirectWrite uses sub-pixel anti-aliasing both horizontally and vertically, while still making use of hinting. Font metrics are preserved to an large extent while font smoothing and kerning are both enhanced. DirectWrite with Cleartype is enabled by default on Windows Vista and 7.
On Apple computers, QuickDraw was the main method of displaying type on pre-OS X systems, from OS 8.5. It enabled the anti-aliasing of Truetype fonts. Adobe's Type Manager was also common among design professionals as it allowed the anti-aliasing of Postscript fonts.
With the advent of OS X, ATM was no longer required as the Quartz rendering engine now provided that functionality. Since Tiger (10.4), Quartz has been extended by CoreText. It uses sub-pixel positioning, and anti-aliases both horizontally and vertically. This approach preserves font metrics at the expense of sharpness, particularly at smaller sizes. CoreText does not rely on font-hinting.
Ubuntu 10.04 can be configured to display text using aliased, anti-aliased or sub-pixel rendering. Users can also specify none, slight, medium or full levels of hinting. This writer has noted that specifying full hinting can give rise to unusually wide spacing on certain fonts at small sizes (the open source Ubuntu at 10px). Specifying medium hinting solves this.
Browser Text rendering
Browsers generally defer to the Operating Systems type rendering engine. This means that on OS X, Firefox, Safari, Chrome and Opera will all use CoreText to display identical text. Similarly, browsers on Windows will employ whichever text rendering system is specified, with some exceptions. The original release of Safari for Windows used its own CoreText style rendering system. Disliked by users, it remains an option, but is disabled by default in subsequent releases.
IE7 has a HTML ClearType setting enabled by default which over-rides the XP system setting, meaning IE7 users will see text rendered with sub-pixel rendering by default. With IE9 the system settings are also ignored and DirectWrite is employed by default.
While browsers defer to the host OS for rendering settings, they do impose their own letter-spacing. Firefox can letter-space in increments of 0.01 ems, Opera uses increments of 0.05 ems while Webkit browsers letterspace in a cruder increment of 0.075 ems. Internet Explorer versions prior to IE9 use increments of 0.05ems while IE9 equals Firefox's 0.01 increments.
View comparison here.
In summary
While older versions of Windows have had somewhat crude type rendering, the release of DirectWrite and IE9 have allowed Windows to equal or exceed OS X in terms of the quality of display. All of the current operating systems and browsers offer high quality text rendering with good support for font metrics and some support for kerning.
A caveat is that Windows XP with its inferior text rendering still has a large market share (43%, Jan 2012), with this likely to continue for some time, particularly among corporate users.