First, let's review how Adobe changed the way Photoshop deals with type in version 6. In previous versions, as in most other paint programs, when you set type in Photoshop it was a pixel-based bitmap. Type was not editable after you set it, if you scaled it up afterwards you would see obvious jaggies. Photoshop 6 keeps the type as vector-based information. This means that type is editable long after you initially typed it in. You can also scale and stretch it while keeping the crisp edges of the font.

The only file format that will retain this type information is Photoshop's native PSD format, when you save a document as a TIF or JPG the type is converted to a bitmap. The Encapsulated Postscript (EPS) format will retain the vector font information for printing purposes. This gives you the ability to work with a lower-resolution image (say 200 dpi) and then print to a high-res printer (1200 dpi) and have the type print at the full resolution of the printer.

To add text to an image in Photoshop, click with the Text tool (it looks like a "T") and start typing. You can change the font, size, justification and color in the Options Bar at the top of the screen (Fig 1). If you need more precise controls like kerning, leading, tracking and baseline shift, you can bring up the Character palette (select Show Character from the Window menu or hit the Palettes button on the Options Bar when the Text tool is selected))