There's no way to use his program with a .png spritesheet of a font I believe.
If you want to use it, you'll have to download a font, open the font in it and then export it.
When setting the character width you're just saying that your character has said width.
In this case, for the letter A I should put an event saying:
"On start of level -> spritefont -> set character width "A" to 5"
So it will only grab the space where the letter is and leave the empty block on the right side alone.
If you have a spritesheet of a font and every character has nearly the same width you can also set every character to the same width.