Is there a trick to getting correct character spacing when using Arial Unicode? If you look at the font sample, there are larger gaps between characters if you don't enable font smoothing.

Shouldn't the gap be a little less when smoothing is not wanted? Or am I just not "getting" it?

Could anyone tell me if this is normal?

Here are the settings I'm using. The top sample in the image above is without font smoothing (which is what I want).

Why do you say that the spacing is incorrect? 

The spacing between characters in fonts are defined by the font designer when he (or she) creates the TrueType font. BMFont just converts the TrueType into a bitmap font. The spacing is usually set to keep a consistent and natural "flow" when reading the text, and not necessarily to keep the characters as close together as possible.

If you want to modify the original spacing then you can do so by editing the font descriptor file after it has been generated. Or you can do it dynamically at run-time when writing the text using the bitmap font, if you have access to the code for whatever application you're generating the font for.