Difference between LCD and CRT text output
CRT monitors' pixels are formed by several dots of different color. On small resolutions a single CRT display pixel can consist of more than 9 colored points. If the screen resolution is huge, the CRT tube pixel contains only 3 colored dots. Moreover, pixels standing side by side can share the same dots! So, on CRT screens low-contrast transitions are blurred, but high-contrast junctions obtain geometric distortions.

LCD displays have square pixels of fixed size. Each pixel consists of 3 rectangular (usually vertical) non-intersecting colored areas. So, diagonal lines and text characters, which are automatically smoothed on CRT monitors, become jagged on LCD screens.

Anti-aliasing algorithms help to solve these problems when rendering raster images. If "Smooth edges of screen fonts" feature is enabled, Windows analyzes a picture around the particular text and adjusts color of surrounding pixels to get a better visual result.

ClearType technology was developed to improve visual result of text rendering especially for LCD panels.

ClearType and anti-aliasing in Microsoft Windows
ClearType technology first appeared in Windows XP. This technology renders the text in a way which makes it look much better on LCD screens with rectangle pixels instead of circle CRT dots.

There are RGB and BGR types of screens, this depends on the color order inside the pixel. ClearType algorithms are absolutely different for each type of displays. Text rendered for RGB monitor looks absolutely ugly on BGR display and vice versa, that's why many people hate ClearType. There are also different Clear Type algorithms for portrait orientation of the screen.

As you can see, the ClearType settings should be individually tuned for every LCD display. And remember that ClearType is useless for CRT monitors.