O and 0 are very similar in lots of typefaces. And I and l and 1. Even u and v. Your brain's pretty good at figuring it out. Context helps a lot.

With narrow spacing and poor kerning it can get much worse, especially if you're reading printed text; I've seen some extremely bad fonts used in print, (usually in italics or titles, but sometimes in the body text as well): m and rn, cl and d, lo and b, jo and p, ijl1, GC0OQ, italic Q2.