In my current Xbox 360 project, which is likely to be released in 18 different languages, all user-visible text is stored as UTF-8. We will have at least 3000 Asian characters (Japanese, Chinese at a minimum) pre-rendered on textures. We will be using the feature I mentioned before of only including the charactres that are actually used in the text.

Rendering characters on demand into a cache does not allow very good anti-aliasing, outlining and shadow effects, or special graphic filters to be applied to the bitmap. These effects all take time to render, which is better done as a pre-processing step before it gets into the game.