I can think of two possibilities of what you might be talking about:
1) DTE - this is the technique by which FFIV (and many other ROMs) use a single byte of data to represent two letters, or a letter and a space. This saves space in the ROM, but still uses the same amount of space on screen. FF4kster (I think) automatically implements the existing DTE table - that is, when you type "th" it automatically knows to use the byte 8C in your ROM - but it does not have a feature to edit the DTE table - for instance, if you wanted 8C to represent "ck" instead of "th" you're on your own there, and I'm not sure FF4kster would know how to adjust to such an edit. You might end up always getting "ck" every time you type "th." Also, there are many places FFIV uses text that do not support DTE: Names, Spell names, Monster names, Item names, Character class names are all among the places you cannot. This is mostly because using DTE would allow for the possibility of making the game try to fit too many letters into a limited screen space.
2) "squishy tiles" - this is a method by which the hacker redraws certain common letter combinations so that they take up less screen space. This is done by using the extra space vacated by the removal of the two Japanese kana alphabets for the new, redrawn letters. An example of this would be using two tiles for "umm" so that the word "Summoner" fits into seven tiles of space instead of eight. Much of the work for this technique (that is, drawing the letters) has to be done by hand using a graphics editing program like Tile Layer or YY-CHR, but once that's done, the config files in FF4kster can be edited to (relatively) easily facilitate implementation of the new letters in ROM.
I should probably mention that I've never actually used squishy tiles myself, so I don't really have any tips on how to do so, but I do know that Rodimus Primal used them pretty extensively for his Namingway Edition hack/localization. He pops up from time to time on this site, but is a much more regular contributor to the boards on RHDN.