Smooth embossing (recessed or extruded) text on a curved surface is quite difficult to do and get it to look perfectly smooth.
There are generally 3 ways to add extruded text to the object of a surface (curved or otherwise):
- A separate extruded text object (may need to convert to mesh) that is positioned on the surface of the main object
- Modelling the text into the main mesh object (lot of work, especially if the underlying surface is curved)
- Using a bw image of the text as a displacement map and adding subsurf to make the text crisp
If the text has to be part of the underlying mesh, then a displacement modifier with a subsurf modifier with a high subdivision level (5-7) can be needed to achieve a perfect surface effect.
In your case with extruded text it may worth looking into keeping the text as a separate mesh object and wrapping it around the surface of the underlying mesh. This will greatly reduce the requirement for high subsurf levels. However you will have a sharp transition where the text and surface meet, and it may be tough to make it look like one piece.
In cases where the text needs to be a recessed embossing, high subsurf for the mesh will be required. If the underlying mesh is not too large you can get away with applying a subsurf modifier to the whole object to get a clean text displacement.
If the mesh is large you likely don't want to use a high subsurf on the whole object. In this case an alternative is to create a separate duplicate of the area around the text, apply the text displacement to the new object, render it out separately and composite it back on to the render object below it.
As long as the material is the same, it works well. You can also feather the edges in compositing to blend it in better. I've used this technique in a project and it really saved my neck on render times.