Anti-aliasing is an optical illusion that tricks the eye into seeing smooth surfaces. In the example to the right you will notice that the W is jagged. This is what text that is not anti-aliased with the back ground colour looks like. By combining black and the red colour the jagged pixels give the illusion of blending. To illustrate this point below the text is on the opposite backgrounds. There is a jagged black halo on "is anti" and on the "-aliasing" there is a white halo. In order to get smooth typography colour matching is essential!
Kerning allows the overlapping of text. With italicized text especially there isn't a natural flow. Normally the space between the text is over emphasized. With kerning you can create a tighter pattern. Unlike tracking below Kerning doesn't just bring the text together. The text can actually overlap.

 

Leading is similar to tracking only on the vertical axis.

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