This is one of the effects I show you how to do in my "Cool Tricks & Hot Tips" book for Premiere Elements! You can see a sample of how it turned out here, listed as Trick #50.
The process is a bit too elaborate to explain on this forum. But basically I had my title on video video track and, on the video track below it, I had a copy of the title with some blur and light effects applied.
If you watch the sample of the effect, afterward you can see a brief tutorial explaining how it was done.
Wow, that is very cool indeed, but is far more elaborate than what I want to do. I simply want to create my own style that will have a halo or cloud behind the letters. As I said, there are some preloaded text styles that have this effect. I'm using PE 10 and the second line right has a text style called "CaslonPro Slant blue70" that does pretty much what I want. I've used Corel Video Studio quite a bit, and this is easy to do with that program.
Just playing around with this, I can more or less achieve what I'm looking for by making a separate title on another track, which just has a rounded rectangle sized and located to fit behind the text, then apply a gaussian blur of 100 to it. This is possible but still a monumental pain compared to creating a text style that I could apply to any title. That way I don't have to fuss with sizing and locating, etc. Any other ideas?
You can also create your Title in Photoshop/Photoshop Elements, where you can add many Styles, including Glows. Just create it on a Transparent Background, and Save_As either PSD, or PNG, to maintain that Transparency (JPEG's do not allow Transparency), and Import that file, just like a Still Image.
PrPro's Titler offers a lot more control with easily appled Inner & Outer Glows, etc., and to control those, one does not have first pick a Style, containing those attributes/FX. However, either version of Photoshop will offer even more, and if one has PS, or PSE, it's a lot cheaper, than buying PrPro.
PS - I use Steve's method often, as I want to animate the Glow (Blur) over time, separate from my Text Title.