Embroidery and graphics are not the same thing. Specifically, TrueType fonts are not good candidates for embroidery. They require quite a bit of alteration to make them stitch-worthy. As such, many companies that specialize in embroidery fonts have design collections which give the appearance of the TrueType fonts, but have been properly digitized by a skilled artist so that they can sew.
Another item to consider is that traditional embroidery lettering designs themselves have a somewhat awkward method of use - individual letters are set in place to form a scene.
The industry has a solution for this though, one that Embrilliance provided and nearly every major digitizing company has adopted, which is to offer their fonts in a way that they can be used with our software (even a free level!) so that you can type with them. This is a system called 'BX' which is the file extension of the installer. There's a list of digitizers who offer the BX installers here: http://embrilliance.com/phpBB3/viewtopic.php?f=33&t=1256
You might check jolsonsdesigns.com, itch2stitch.com, designsbyjuju.com and 8clawsandapaw.com for deals on properly digitized fonts which have TrueType styling. However, TrueType is only 1-color lettering, and embroidery is a world of color, so you might be dazzled by the gorgeous fonts available to embroiderers for all sorts of purposes.
Next, we do have people who use our software to digitize fonts. StitchArtist is very popular as a digitizer for lettering and logos. Level 2 has the correct tools used to digitize lettering properly, although level 1 has an auto mode that can do some things reasonably well. (Auto-digitizing of fonts is not a perfected art by anyone yet).