There are three main methods for generating characters using software: the stroke method, vector/bitmap method, and starbust method. The stroke method uses a sequence of line and arc drawing functions defined by starting and end points. The starbust method uses a fixed pattern of 24 bit line segments to represent characters. The bitmap method stores characters as arrays of 1s and 0s representing pixels, allowing for variable font sizes by increasing the array size. All the methods can create aliased characters, and the starbust method requires extra memory to store the 24 bit segment codes.