Will type in an eps be smooth?

I sent a Photoshop pdf file to my customer's printer in India. I sent it as I usually send files to China, as a  PDF/x-1a, compression zip. (I have been sending art to China this way and it has been coming out fine-they are small hang tags). However, the printer in India replied that the wording appears distorted and to send vector files. He said to send an eps file. Would making the original file into an eps file work? Would the type remain crisp? My Quark and Freehand apps are way out of date and I don't know Illustrator or InDesign (tho I have copies, just haven't learned them yet). Attached is the pdf file I sent. I'd appreciate your feedback as to what is wrong with it, and what I should do here. Thanks!

This glyph problem, and the fact that InDesign clears it up, is a little troubling.
I made a test file in Photoshop using the same fonts, Franklin Gothic Demi and Franklin Gothic bold. I saved as PDF/X-1a, prefighted in Acrobat and got the glyph error.
Then I saved as EPS, and distilled using PDF/X-1a. Very interesting result. No fonts at all - the fonts are converted to outlines.
So to answer the OP's original question, the type in the EPS is smooth, and the printer shouldn't have any font problems, because all the text will be outlined. To verify, open the EPS in Illustrator and view as outlines, all the text characters are shapes. Or distill the EPS, open the PDF in Acrobat. You will see there are no fonts, and zooming in, it's evident that the characters are smooth vector shapes.
I'm still not sure why Photoshop can't include a decent font output in a PDF (at least with these fonts), and I have no idea why InDesign clears it up.
One other thing I should mention about using fonts in Photoshop, and why the result is so different from fonts created in vector applications. As I stated earlier, with fonts in Photoshop the character fills are image pixels. This shouldn't really make a difference, but to a printer it makes a big difference when it comes to trapping. If the text characters need to be trapped to surrounding elements, it requires image to image trapping, which is not at all the same thing as image to vector trapping.
Most font output I receive originates from vector based applications. Every now and then I get a Photoshop PDF with fonts but it's a rarity. Usually the Photoshop designs are supplied as flat images.
Many times too, I see PSD or TIFF ads placed in InDesign. These have no vector content at all.
Since Photoshop fonts can be problematic, it may be an option for the OP to save out a flat image with no vector data. True, the fonts aren't crisp. But I proof and print flat image ads with text all the time, and the result on press is surprisingly good. How good depends on a lot of things - the font, type size, resolution of the Photoshop image, and the line screen used when printing. I am willing to bet that in certain cases, if the vector output and flat image output were printed side by side, it would be next to impossible to tell the difference.
With a flat image the type characters do not have as good appearance on-screen. But with a small job like the OP's hang tag, the PDF displays much larger than the print size. Differences between raster text and vector text can be somewhat deceiving. Something else with fonts in Photoshop - they don't display as vector in Photoshop. So a flat image output would actually be truer to the text appearance in Photoshop.
Back to the trapping. If it's a flat image, the printer will almost certainly not trap the text, because it's part of the image. But if the type is anti-aliased in Photoshop, the softer edges create a sort of natural trap. Furthermore if the type is by itself on a white background, the soft edges are much more forgiving when it comes to registration on press.
If the type is vector, the trapping is questionable. It will only be generated if the printer enables image to image trapping. If he doesn't, there could be a registration issue on press (depending on the colors used).
The biggest issue I see every day with text created in Photoshop is 4C black text. The OP may be aware of this problem. It's best if black text is 100K only. But if it is 4C black, registration is easier if the text is image instead of vector.
My apologies for rambling on. Mike or Marian may have more insight on some of these matters.

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