Yup, the best is to work with a lossless compression format (such as BMP, TIFF, PSD, etc) until it's ready then save it for the web. But that takes quite a lot of space. No wonder my work directory is a couple gigs hehe.
As I said in my article, try to avoid using red text as it really smudges when saved in a jpg. But anyway, the colors that people will see the most are white and yellow, two colors that jpeg loves hehe. You can still use red, but use it for the background, for example :
Another way to make your text easier to read and less destroyed by compression is to have a border around it :
Without a border and a shadow this text would have been really hard to read in this color.