I'm wondering what practice you guys follow. Seems like having text within graphics (buttons for example) would make localization a headache, as you need new graphics for each language... do you leave text out of graphics?
Yes, avoid text in graphics as much as possible! There may be exceptions (Big logos, title graphics etc) but on the whole... avoid it, it'll save you big headaches in the long run. Always be weary of long german, russian and japanese versions of english words though. Try not to fit english text to exact dimensions of boxes and such.
For me, anything that has text is a UILabel. Buttons for me are blank images with UILabels superimposed. Hopefully when I go to localize, it will be pretty trivial as a result.
Most of our games mix baked in text in graphics and strings. Moto Chaser is entirely images, no text at all. Works fine in French, Spanish, Italian, German, Japanese and Chinese.