Don't forget the ImageMagick lists. The authors are regulars and have helped me out with very specific advice that's helped several times.

Ditto on the JPEG comment. I've used annotate with GIFs and gotten decent results.

It's also not clear to me why you're iterating over fonts and writing the same text out for each one. That may be what's giving it the lousy appearance. I'd think you'd end up with "layered" annotations; each font on top of the other.