Make Your Own Typeface

Okay, it's not exactly making a typeface, but it's a pretty cool way to change the look of type in a way that's very flexible. Enter some text with the Type tool (T), select it with the Selection tool (V), and from the Effect menu choose Stylize>Round Corners. Check the Preview checkbox and then experiment with the Radius field using the Up and Down Arrow keys to get the result you want. Of course, the effect can always be edited by double-clicking the words Rounded Corners in the Appearance palette.