When embedding an Excel chart on a PowerPoint slide, why does the text look awful?

I have a recurring problem with Excel 2003/PowerPoint 2003, where I have a nice-looking chart in Excel and try to embed it on a PowerPoint slide. Quite often, the text in the chart (labels, axis labelling, etc.) looks dreadful in PowerPoint - yet when I open the embedded chart it looks perfect in Excel.

For example, see this very basic one-slide presentation containing a simple chart. For those not prepared to download the PowerPoint file, here's a screenshot:


As you can hopefully see, the text looks very ugly - it looks like it's been rendered as a bitmap and then scaled (except that I can tell that's not what's happening, because the kerning of the characters has also gone awry).

Note that if I open this presentation using Office 2007, it doesn't look quite so bad - and if I then open the embedded chart and immediately close it, it gets much better. That doesn't happen on Office 2003, though.

If anyone has any idea how I can fix this - or even knows for definite that it's a known problem that cannot be fixed - I'd be most grateful.