have you looked into
bitmap fonts? i know there are a number of fonts (and dll's and code examples of how to use them) floating around the forums here. (doing a forum search for "bitmap font" will prove fruitfull)
also, using
set sprite priority could help once you decide on/create your font set (assuming you'd like to use sprites for the text). utilizing priorities will get your "text" sprites to draw on top of all other "game" sprites of lower priority (for that matter, carefull attention to sprite numbers/sequence can achieve the same results).
and, to respond directly to "turning text into sprites", some folks use
print or
text to get letters/numbers/words on screen and then
get image(s) of them for use with sprites. i think it would be a little tricky to get clean letters/digits that way and keep transparency, etc, but i suppose its possible (and the common "media-less" approach).
Virtual Nomad
AMD XP 1800+ (~1.6 Ghz) / 1.5 GB RAM
ATI Radeon 8700LE 128 MB / Windows XP