Here's how we handle embroidery for labcoats in Shopsite Pro 8.3. Enter a coat to see how it shows up in our cart.
http://www.ackley-uniforms.com/landau_3138.htm
We use css to format the embroidery text in the textarea box so that it looks more like real sewn embroidery and is rather large, making it less likely the customer will overlook a typing mistake. The large bold font helps the customer understand that he is limited to roughly 24 characters and three lines. We added the dashed border and grey background so it would be super-clear where the customer is to enter text.
Note the header directly over the box which even includes a link to a popup with additional info.
This was probably over-kill but we used to get tons of emails/calls from customers (often doctors) who were puzzled by the process. With each of our many enhancements to the process, questions diminished.
I'm not a programmer. This was all done by trial and error. I'd be interested in comments from Pros who have tackled similar situations.