Thanks for the explanation. I've been reading a lot about black body radiation, so let me see if I have got this right.
The reason the frequency of light is quantized when emmitted from an atomic orbital is because the orbitals are quantized according to energy, and a release in that quantized energy produces a quantized photon using Planck's equation E=hv.
When you have free moving charges, the black body curve is produced by the quantization of the emission and absorption of light. The free moving charges can produce any photon, but the charge must have enough energy to produce that particular photon. Since temperature is a measurement of the average kinetic energy of the particles, the probability of any deviation in kinetic energy for any one particle is inversely proportional to the deviation. To produce a photon of very high frequency, the electron must have a large kinetic energy and the probability of this is proportional to its deviation from the average kinetic energy. This is why the black body curve drops off at higher frequencies.
So in a dense ball of charged particles, the energy is going to be distributed according to the average kinetic energy, but it will be continuously distributed and hence there will be a continuous spectrum. Inside an atom, there isn't a continuous distribution of energy, it is quantized, and thus the spectrum is quantized.
Does this sound accurate?