I must be missing something, but I can't understand why there's a distinction between regular text and hi-res "retina" text. IMHO text should always be displayed in the highest possible resolution on the device, and thus only one newText() function would be necessary.

What I'm using now to solve this issue is the following function, which is working well on all devices I've tested it on. It should also be future-proof whenever the iPad comes out with a high-res display as well.

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Module.newText = function(str, xPos, yPos, font, size)        
        local scaleY = display.contentScaleY;
        local scaleFactor = 1.0;
        
        if (scaleY < 1.0) then
                scaleFactor = 1 / scaleY;
        end
        
        local text = display.newText(str, 0, 0, font, size * scaleFactor);
        
        text.xScale = scaleY;
        text.yScale = scaleY;
        text.x = xPos;
        text.y = yPos;
 
        return text;
end