You can try this until you are pleased with the result.
1. Open the image.
2. Select text tool and create the text.
3. Simply the text layer .Choose "Layer Menu>Simplify layer".
4. Go to "Window Menu>Layers" and try different blending modes until you get teh result you want. Some of the blending modes like "Overlay" can give you good results.
Or, after step 3 in 27Prac's instructions:
4. Make sure the text layer is the active layer, use one of the marquee tools to make a selection, add a largish feather, select>Inverse, Delete.
There are several ways to do this, but it depends on what you want to do.
Note that once you simplify the text, it's just a bunch of pixels and you can't edit it anymore, or resize it more than you can any other pixel image.
Depending on what you want, here is another suggestion:
I am making a book cover in Elements 9. It has a gradient as the background. That is, it's dark blue on one side and blends to white on the other side. I have a blurp to put on the back cover. Since the background is not a solid color, text doesn't show up very well so I made another little photoshop document with a white background containing the blurp. I want this document to bleed out into the background.
I am using Photoshop Elements 9 on a MacBook OS 10.6.8. I don't see anything that says picture file, or text panel. I did find the effects palette but it doesn't chane my document at all.
I do see Layers along the top of the screen. I click on that and I can get Layer Style>Style Setting>and then I can choose Drop Shadow, Glow, Bevel and Stroke. None of them affected my document except Bevel and it gave me a nice feathering around 2 sides of the blurp, which will work well. I just have one more question. At the moment the bevel is black. Is there a way to change it to blue--the same blue as in the background of the cover? I used the eye dropper to turn the the background or foreground colors, but still the bevel is black.
Thank you all very much. I am an amateur as you can tell, but I put a question in here and a few hours later I have an answer. I'm learning so much. Thank you.
I don't see anything that says picture file, or text panel
Picture file means an image. We were assuming you wanted to add this to a photo. Text panel means the text box, the layer with the text on it.
To edit a layer style after you've applied, go over to that layer in the layers panel and you will see a little script "fx" there. Double click it to bring up the style settings and you can change many things about the style.
Thank you all. Now I'm experiencing another challenge. I have a lovely little text box with a white background that contains a blurp for the back cover of the book. I put a bevel style on the white background layer so there is a pretty little feathering around the white text box. The beveling started black, but, per your kind advice, I went to the hue/saturation button and made my feathering blue rather than black. So far so good. I got my blurp text box the way I wanted it but when I put it onto the book cover, it changed back to black again. I'm going to keep experimenting, but your feedback is always welcome. Thank you.