I've definitely seen this idea before, and I think it could have been a Task Of The Month a long time ago. I don't remember the results of the majority of people, though.

I've personally had false awakenings where I get up and go on DV to tell everyone about my dream and everything was just as it should be - the idea that text is distorted in dreams is just one of those things that changes depending on your expectations and sometimes the stability of the dream. I normally have no problem reading text in a dream, unless I am purposefully doing a reality check and want it to change.