Magazine or Website Text Effect with Background Tutorial
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Step 5:
Make a round selection just like mine below or something similar if you use a different sized canvas.

Make a new layer and fill the selection with black, then add the following blending option (inner glow).

Now that looks awfully strange doesn't it?

Well.. to achieve a circled inner glow effect all we have to do now is change the blend-mode of this layer to Lighten, this blend-mode will only show the light parts of this layer automatically hiding the black. Oh right! Also change the Opacity of this layer to 17% or something similar to that if you prefer.
Step 6:
The background is done like this, now let's head on to add our awesome text effect! Type your crazy text and add a drop shadow, make sure your text is white. I've used the Impact font and used different font sizes, you can easily change the font of a word/letter inside ONE text layer by selecting that word/letter.
Drop shadow settings:

White text with drop shadow:
Step 7:
Make a selection of the text layer, you can do this by holding the control key and clicking on the thumbnail in front of the layer in the layers pallette. Go to Select > Modify > Contract and use a 4px, hit OK. Then create a new layer called "Black inner text" and fill the selection with black.

Now since I have different font sizes what we just did looks weird on the small letters, though we can fix this very quickly. Make a new selection of the original text layer like we did before and contract it with 2px, don't forget what I'm about to tell you! We have to delete some of the selection (the selection of the big letters). You can do this by holding the ALT key with your rectangle marquee tool selected and click-dragging over the selection you have to delete. Easy stuff huh? Now that we have that out of the way fill this selection with black too on the same layer (layer we've called "Black inner text").
Step 8:
Make a selection of the "Black inner text" layer, make a new layer and fill it with white and cut some parts out of it with your preferred tool, the polygonal lasso tool is a nice one for this job
.

Set the opacity of this layer to 17% and your done with this step too! It's coming along now.. Just one minor thing we have to do that will make a big difference.
Step 9:
That minor thing is the following, brush some highlights here and there that will make the effect complete. Make a new layer, select the brush tool with a small soft brush and set your foreground color to white. Now make a selection of the "Black inner text" layer again and contract it with 1 pixel (Select > Modify > Contract), the reason we do this 1 pixel contract is that it will make a bit of 2D effect that will make the text effect look much nicer! I hope you think so too, if not.. whatever
. Now brush at some spots you think needs those super duper highlights or you can follow my example below.