Another advantage is that if you own a tablet pc or a (Wacom) pentablet, you can use it to fill in the template digitally. No need to print and scan the template.
The mechanism can also be used to trace bitmaps, since the tool does not distinguish between characters or other designs. The result is a font with vectorized images.
Alternatives:
- Fontifier (http://www.fontifier.com/): almost identical to Fontcapture, but charges $9 per font
- Yourfonts (http://www.yourfonts.com/): almost identical to Fontcapture, but charges $9 per font
- Fontgrinder: (http://www.fontgrinder.com/): idem, but charges even more: $14.95
- Fontstruct (http://fontstruct.fontshop.com/): free, but doesn't support handwritten fonts. The website has an editor for constructing your own font from predefined building blocks. A sort of "lego-for-font" method.
UPDATE 20100106: Unfortunately, the site has been taken offline. The domain is now referring to yourfonts.com. No free alternative is available anymore.
UPDATE 20110727: There is a new website offering the same free funtionality: http://www.myscriptfont.com