I use Angelcode's Bitmap Font Generator. It creates great quality font textures with a data file that details the position of each character in the texture.
http://www.angelcode.com/products/bmfont/

There is also some pseudo code on that page showing how to draw a character. BMFont now also gives you the option of using the alpha channel for the font image (the RGB channels are all white). This gives the best results when blending over a background.