I've been trying to get text above model heads (their name) in the 3d world with little luck.
Looking at the text demo's in the source I've tried the text2d stuff but that seems to be for a gui or printing debugging info. The text seems to be locked to screen coords.
The 3DFlatText demo looked to be close but I can't get billboarding to work.
What would the best way to do this in jme?
for a start you could try com.jme.scene.Text combined with com.jme.scene.BillboardNode (i didn't try myself, but i don't see why it shouldn't work)
Text is set up to render in the ortho queue ("2d"), so you will have to change that.
I did this in my Dirt game with the Text class. You should be able to make use of world to screen coordinate abilities in DisplaySystem to find the correct screen location for your text. You can even go further by using the distance to the point from the camera to scale the Text.