It is true that TEXT can handle any input you'd place in VARCHAR or CHAR field. In fact TEXT could handle and data you might want to put in DECIMAL, INT, or almost any other type as well. Following this logic we might as well make every column a TEXT type.
But this would be a mistake. Why? Because using the appropriate column type for the expected input allows the database to better optimize queries, uses less disk space and makes the data model easier to understand and maintain.
In regards to the questions: a username column should use VARCHAR(20), since you would want and expect that most usernames are going to short, usually no more than 10 - 20 characters long. For a review column (like a movie review or book review) a TEXT type would be appropriate as reviews can span a single paragraph to several pages.
In regards to indexes, try this link:
http://20bits.com/articles/interview-questions-database-indexes/