Crossroads

Lohit Telugu is an open source Telugu font primarily found in Linux distributions. It is Unicode compatible. It looks great. Here is a sample of this font:

INDOLIPI is a multipurpose toolbox for Indoligists and linguists. It contains Open Type Unicode fonts for most of the Indian languages. It also contains input layouts for Indian languages and other tools. This toolbox also has a Telugu font. Below are the sample and download instructions.