Text within images can be difficult to read. Images don't scale. Magnified images appear pixilated. Using text properly reduces file size, permits scaling & easy updates, reduces potential for accessibility errors (missed alt text).
If possible always use text rather than images of text. Exceptions:
Logos, important special text effects
Never put essential text within an image
Do not put large paragraphs of text within an image
Avoid for important navigation (menus, etc.)
Tip: Often the same can be produced using text styling and background images in CSS.
Tool: Where text as images is used, check its clarity by scaling up.
Tip: It is ok to use images to show Japanese, Chinese, Hebrew, and other international language characters, but remember to use the appropriate alt text to convey the same meaning.