Well, I spent some time playing "Texas Hold'em" last night on my TV at home...my standard definition TV. I still haven't picked up "Dead Rising" yet, but I'm fairly certain that based on what I saw, I now understand the issues that those players were facing in that most of the actual in-game text is almost illegible on a standard definition TV.
Menus are appropriately sized and even most of the pop-ups are legible, but the actual text in-game for items like commands, status, etc., are near impossible to read. What's even worse is that there are times where it is difficult to tell the difference between a club and a spade, and in poker, that can be lethal.
I hear the common defense of "We're optimizing to HDTV's" and I don't buy it. HDTV penetration is increasing, but most of the screens that are being sold are in the 20-25" range...meaning that the TV isn't going to be that much larger than a current TV screen. Sure, the text may look nice and crisp, but if it can't be read from 10 feet away, what good is it? The 10' experience must drive your artistic decisions with console games. That's generally going to mean that any text you are relying on the end user reading should be no smaller than 24 pixels tall if you are rendering to a 1280x720 framebuffer, and fonts should not be "narrow" fonts where possible because of how narrow fonts blur out on a regular TV.
The fonts in "Texas Hold'em" are 16 pixels tall, and appear to use Arial Narrow. The mission prompt glyphs (under the selected weapon icon) in Dead Rising range between 8 and 13 pixels tall. While they're outlined so make them slightly more visible, that's still too damn small.
To give you an idea, the "Number of Zombies Killed" text in the bottom-right corner of the screen is 22 pixels tall, but the font is a nice bold font with vertical strokes about 6 pixels across. And you know what? You can read it. What a novel concept.
If you want a "rough idea" of how your game is going to look on an SDTV, but don't have an SDTV handy, here's how to do it.
Load up your game and take a screenshot. Open up your favorite image editing software, and proportionally resize the screenshot to a width of 512 pixels. Save the screenshot as a JPEG. Here is an example from "Dead Rising" (screenshot from TeamXbox):
Finally, show it to someone else. If they can't easily read the text, it's too damn small or blends too easily. It's very difficult to read the "Backup for Brad" string in the upper right of the screenshot.