21st April 2009
After trying several of the kind, I found CHXO email address to image converter a reliable and working one.
It supports transparent PNGs, and just works. Also, it comes with a complete PHP source, so it looks like you can embed it into your own web-applications. (As it is GPLed, I’ve saved a copy for myself.)
For Gmailers, there’s a nicer generator.
If you’d like to convert larger amounts of text to images, then use hidetext.net: