By default LyX uses the T1 font encoding, and therefore the EC fonts.
This is caused by the following line included in the .tex output:
  \usepackage[T1]{fontenc}

Some LaTeX distributions (e.g., RedHat Linux 6.2) contain Type 1 fonts
for Computer Modern, but not for EC. Therefore, on these distributions
both dvips and pdflatex use bitmapped fonts for normal text. This
reduces rendering quality on high-resolution devices, and produces
horrible PDF files.

The problem can be solved by manually removing the above line after
export, or by adding the following line to lyxrc:
  \font_encoding default
Of course, the font map needs to be properly configured (it is on
RedHat).

I was unable to find any reference to this issue in the LyX
documentation, and not being a TeX expert it took me quite a while to
figure this out. 

I don't think the T1 encoding should be disabled by default, since it
solves the hyphenation problem with accents, and since the problem is
distribution-specific. However, I would expect this to be a common
problem,  given the popularity of PDF. Please consider making the T1
encoding selectable from the LyX GUI and documenting the implications.

  Regards,
    Eran Tromer

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