I am not entirely sure how fair of a comparison I am making, but I am open to suggestions on how to better compare the hypothetical output of a font designed using METATYPE1, where a Type 1 font would be directly generated, versus a font designed using METAFONT, where a Type 1 font is generated using mftrace.
For my experiment, I chose to compare glyphs from the Type 1 version of Computer Modern maintained by the American Mathematical Society, which was presumable crafted by manually tracing the bitmap version and optimizing various aspects by hand, with glyphs generated by mftrace on 3000DPI bitmaps generated from the METAFONT source. I could imagine that it might be fairer to compare the result of using nearly identical METATYPE1 and METAFONT source to generate the Type 1 glyphs, but then I would be biasing the design process towards the limitations of METATYPE1. I had considered using the METAFONT source for AMS Euler, because the source is simply the outline and would be easy to convert to METATYPE1.
I also decided to use glyphs with plenty of curves for the test, as I figure that tracing software can probably do a pretty good job with straight lines.
In any event, I will leave it to you to decide whether you can distinguish which is version is which below. The order in which the two versions appear differs for each of the three examples below.
As you might have guessed, my opinion is that results are so nearly indistinguishable, that given the design limitations of METATYPE1, it would make much more sense to work with METAFONT and mftrace, and use FontForge or a similar tool to add hinting as a postprocessing step.
I've been spending time lately learning more about working with METATYPE1, mostly for my own projects, but with the eventual hope of writing some tutorials. While working on one of my running examples, I was encountering some difficulty expressing what I wanted in a reasonably declarative fashion. So I decided to see how it was done in Latin Modern.
I was dismayed to learn that Latin Modern is not a meta-font like Computer Modern. Instead the Type 1 versions of Computer Modern (which was developed by either Bluesky or Y&Y) were decompiled into MetaPost code as raw path outlines. So at that point all of the useful abstractions in Knuth's original code and specifications have been lost.
The only other major typeface developed in METATYPE1 that I know about, Antykwa Toruńska, has no source available and from the description I highly suspect that it was developed by creating raw paths that matched the scanned specimens. This got me thinking about whether there are any meta-fonts that have been developed in METATYPE1, or even whether Computer Modern might be the only full meta-font family in existence. I just skimmed through the METAFONT sources that are included in TeXLive, but didn't see anything particularly promising yet.
In any event, going back to the original issue, I have been starting to think that maybe the limitations of METATYPE1 are perhaps not worth being able to directly generate Type 1 fonts. It could be entirely possible that working in METAFONT and using something like mftrace to generate outline fonts from high-resolution bitmaps will produce results of sufficient quality. I'm hoping to do some tests to compare the two approaches this weekend.
(It is worth noting, that the comment about METATYPE1 on the mftrace page is slightly incorrect or out of date. METATYPE1 can handle overlaps, there are just complicated restrictions on how overlapping may occur. Finding clean approaches to avoid these restrictions was why I became interested in looking at the Latin Modern code to begin with.)