My understanding of the "text to graphic" approach is that the model would have a designated nameplate geometry section (much like the insignia for fighters) that would automatically have the ship's name placed on there. Then you have bounds on where to place the name, as well as UV data to map it to, so the only complication would be rendering out the name at the start of the mission to a suitably formatted tile. Bob brought up decals, which implies a wholly different approach (in that either the string or each letter, depending on how he went about it, would have its own polygon created for it dynamically) and my original point was that this approach, while suitable for small pockmark-like damage decals, probably would raise a lot of really difficult problems if applied to a multi-character string of arbitrary length. You'll either get super-condensed text, whose width varies from one ship to the next, or you'll potentially find letters trailing off into space, turning very sharp corners, or otherwise behaving strangely/poorly if each letter gets its own polygon. While I believe the second alternative is unlikely to happen anyway just because of the inefficiency involved, it's a question that I felt I needed to ask.
Also, there is the problem of alien ships. Not even Star Trek, the masters of "all the aliens look just like us" routine, have ever made the mistake of using western characters for the aliens' language. I could see wanting to put a nameplate on a Vasudan ship, but if it's going to come up in the Stop font and in English, then there's a problem.
