Create a new image and make it 400 x 150, background white.
Now create a new layer, call it text.
Get the text tool (type tool) and write what you want. Hint, the larger the letter the more effect you get. 
After that right click the text layer and choose rasterize layer.
Now Ctrl click the text layer so you get a selection.
Click the channel’s tab and click the save selection as channel button. 
A new channel will be created called Alpha 1.
Now click on this channel to make it active. If the background is white and the text is black double click the channel and pick masked areas under color indicates. Ok that, and now the text should be black and the background should be white.
Ok, now zoom in to about 200%. Make sure your selection is still active.
Go to Filter > Blur > Gaussian Blur and pick about 3.
Ok that and do it again but with half, about 1.5. Do it one more time at 0.5.
What we are doing is rounding our text for the next step. Ctrl + D to deselect. It should look something like mine.
Click on the layer tab to go back to your layers and click your text layer.
Ok now go up to Filter > Render > Lighting Effects.
You will see a round light called a spotlight, change this to directional.
Also click and hold on the light where the arrow is pointing. This lets you bring more lights onto the stage.
Position the lights like mine and change the intensity colour of one of them. Now you can play around with the sliders and see what looks best. Now down the bottom there is a drop down menu called texture channel, click this and select Alpha 1. That is it.
Press ok.
Hopefully it should look similar to mine. Looking all right ah
Now add a dropshadow to it. I don’t use layer effect so I will tell you how to make your own shadow.
Duplicate the text layer by dragging it over the new layer button and let go. Put that layer so it sits directly under the text layer. Press Ctrl + u to bring up Hue/Saturation. Drag the Lightness layer down to the left so it is completely black. Press ok.
Now drag it down and left so you can see the black text. Filter > Blur > Gaussian Blur and pick about 3 or 4.
Now just add some final touches like the background colour and extra text.
Hope you all liked it.
January 21st, 2009 at 6:55 pm
very good effect indeed helped a lot in understanding
September 24th, 2009 at 12:51 am
Nice site! good tutorials for practice.
February 27th, 2010 at 9:42 pm
Appreciate it. Still an additional incredible way of seeing things
LAURENCE