I’ve just turned on sub-pixel rendered anti-aliasing on my desktop, using gdkxft and KDE 2.2.1. It’s amazing the difference it makes. Previously, anti-aliasing was pretty similar to just taking my glasses off; but with a TFT laptop screen, you can enable the ClearType-style sub-pixel rendering, and it becomes very smooth.
Dunno if rxvt has it yet, though, so I’m still using blocky ol’ text in my terminal windows.