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Talk about Adafruit Raspberry Pi® accessories! Please do not ask for Linux support, this is for Adafruit products only! For Raspberry Pi help please visit: http://www.raspberrypi.org/phpBB3/
It could be a problem in the display, the raspi output or the cable. The best way to figure out which is to start swapping components. Try a different cable if you have one. Also try a different video source with the display or a different display with the raspi.
After trying the display with a different board and cable, and using the recommended settings (sdtv_aspect=3, framebuffer_width=480, framebuffer_height=234), text on the monitor is still unreadable.