Create a font with the text tool using any color you want (I usually use gray). Photoshop should make a new layer called "Layer 1" with your text in it. If you're using photoshop 5.x or better, you'll need to rasterize the layer so you can draw on it later. Now make a copy of that layer by dragging "Layer 1" onto the "create new layer" button. After that you should have two layers labeled "Layer 1" and "Layer 1 copy" containing your text.

Select "Layer 1" and do something to it...fill it in with a texture or whatever you want. Generally I keep this layer somwhat plain, but that's just my style; you can do whatever you want. If you're curious, I used a photo of some messed up concrete that I colored purple =)

Now we do the same thing with "Layer 1 copy". Go crazy and fill it with something crazy. On this layer I usually use something that has more detail and contrast, but like I said, that's just my style. This texture was created in KPT3's Texture Explorer program.

Now hold down the CTRL key and Left Mouse Click "Layer 1" to get the selection of the text layer. We'll need this to create some channels in the next few steps.

Switch to the channels palette, and click the "save selection as channel" button. This will create a new channel called "#4". If you can't click that button, go back and do step 4. We don't really have to do this step, but I thought I'd show ya how to save a selection. A channel is how you store your selections for later use, although, as you'll see in the next few steps, you can also use them as masks and control transparency of a layer.

With the text selection still active, click on the "create new channel" button which create a blank channel (all black) called "#5". Now click on the "Gradient" tool and fill in your selection with a horizonal gradient from black to white. (In step 9 you see how it controls the transparency and makes things fade out and reveal what's underneith it.)

Hold down the CTRL key and Left Mouse Click channel #5 to get its selection. You'll notice that it only seems to select half of the text, but trust me, that whole channel with the gradient is selected (photoshop only shows selection from 100% white to 50% gray).

We're all done creating the channel mask now, so switch back to the RGB channel (the very first channel in the channel palette), or if you like keyboard shortcuts, hit CTRL+~. You should see what's in the picture on the right (layer 1 with the selection of the gradient channel).

Switch to the layers palette and click on "Layer 1" to make sure it's active. Now click the "Add Layer Mask" button. This uses the gradient channel we created earlier as a mask that controls its transparency and reveals what's under it.

That's it! Finish it up, add a bevel, add a drop shadow, whatever. I just add simple border and offset it a bit.