I bought an Xbox 360 more or less recently and I feel like I have trouble reading any kind of writing on the screen, and my eyesight is fine (at least with my glasses on) so I highly doubt that is the problem. I've seen the same problem occurring on what you'd call normal-sized font (for quests, tutorial, subtitles, etc.) in Assassin's Creed, Just Cause 2 and Splinter Cell Conviction.
I'm playing on a rather old (~10 year) 51" television. Is it possible that it is too old for the Xbox and its rather high resolution? I tried fiddling with my TV settings, but nothing I did really helped. I have had no such problem with my Wii or, formerly, my GameCube, but they both have much lower video capacity.