Disclaimer: this writeup uses Unicode. If the Greek sample texts appear as boxes or question marks, you may need to tweak your browser.
In ancient Greece and Rome, writing materials were expensive and preparing them was labour-intensive, so it was important to be as frugal with them as possible. One result of this is that manuscripts in late antiquity were written in scriptura continua, which is to say, they were written without using punctuation and without putting spaces between words. Neither Greek nor Latin distinguished between what we would call uppercase and lowercase letters either. For the purposes of aesthetics, the scribe would try to keep all the lines roughly the same width, usually creating two columns on a page.
THEEFFECTINENGLISHWOULDLO CLEARFROMPASSAGESLIKEACTS
OKSOMETHINGLIKETHISASYOUC VIII.XXVITHESTORYOFTHEETH
ANSEEITCANBEVERYDIFFICULT IOPIANEUNUCHTHATITWASASSU
TOFOLLOWANDPRACTICALLYREQ MEDTHATANYONEWHOREADANYTH
UIRESREADINGOUTLOUDANDITS INGWOULDREADITALOUD
In Latin manuscripts, it was standard practice to abbreviate common words and endings and then cram all these shortened words into scriptura continua, giving the reader a splitting headache (along with the distinct impression that she is reading an ancient form of l33tsp33k). This phenomenon wasn't as widespread in Greek literature, though anyone who wants to learn to read Christian manuscripts in Greek will need to learn a series of religious abbreviations known as the nomina sacra.
The absence of spaces in scriptura continua can lead to some confusion when interpreting ancient texts. In the penultimate line of the example above, I intended to say ANYONE WHO READ ANYTHING. However, the scriptura continua makes it easy for the reader to think I wrote something much nastier.
Neither ancient texts nor ancient readers were immune to these problems. Consider the example of Mark 10:40. In scriptura continua, the Greek looks something like this:
ΤΟΔΕΚΑΘΙΣΑΙΕΚΔΕΞΙΩΝΜΟΥΗΕΞΕΥΩΝΥΜΩΝΜΟΥΟΥΚΕΣΤΙΝΕΜΟΝΔΟΥΝΑΙ
ΑΛΛΟΙΣΗΤΟΙΜΑΣΤΑΙ
As it happens, the letters that I underlined could be read αλλ οις (all' ois, "but those for whom") or αλλοις (allois, "for others"). The change in meaning is significant: Jesus is either saying that places at God's table are set for the ones for whom it has been prepared, or he is saying that this table arrangement has been prepared for others. The manuscript tradition favours the first reading, but a few important texts seem to prefer the second.
Scriptura continua was not consistently used in the Middle Ages. Rubrics and illuminated capitals became popular as a way to set sentences or paragraphs apart from one another, and limited forms of punctuation eventually made their way into manuscripts too. Even in these later texts, however, it is easy for eyestrain and exhaustion to lead to misreadings.
Further Information:
This picture of one of the most famous manuscripts in the world, the Codex Sinaiticus, will show you what scriptio continua looks like:
http://www.katapi.org.uk/BibleMSS/Sinaiticus.htm
Though this site focuses on early modern materials, it has a fine tutorial on decoding Latin abbreviations:
http://paleo.anglo-norman.org/contract.html
The case has been made by numerous scholars that reading silently -- a pleasure that we take for granted -- began only after the death of scriptura continua. Paul Saenger's Space Between Words (Stanford University Press, 2000) is one example of a book that makes this argument.
Finally, the following page is an advertisement for some commercial software aimed at professional palaeographers; I link to it because the screenshots show you the difficulties involved in decoding mediaeval texts:
http://www.ruhr-uni-bochum.de/philosophy/projects/abbrev.htm