The following image below is an example of bad letter spacing because if you look closely the first two letter the O,P are much closer together than the P and T. And also at the end the Y is a tad bit further than the R.
The following image below is a great example of good letter spacing because the all of the letter are evenly spaced even though the letters are tightly together. And the spacing between the actual word are evenly spaced as well.
