First open a new image with these settings:
W: 300
H: 300
Res: 75
BC: Transparent
16.7 Million Colors

Next open a copy of the graphic that you wish to use.
I will use this one for this lesson:

Next take your selection tool and set the tools box to:
Elipse > 0 > Antialias Checked

Make a oval around the picture area that you would like to use like this:

Next click on Edit > Copy > Paste as New Layer (on the new transparent graphic. Save this background and open it in PSP (this would be the background that the graphic will be on, on your webpage).
Just click anywhere inside the box.

Next Use your Text tool and decide which font you want to use and the size (the thicker the font the better it looks).
Set these settings:
Create As: Floating and AntiAlias Checked then click OK.

Now flood fill each letter with the background image (like this)...
(Except yours is on the transparent background with marching ants around it : )

Next go to the top and click on Image > Effects > Cutout with these settings:
Fill Interior With Color UNchecked
Shadow Color: Black
Opacity: 100
Blur: 1.6
Vert. and Horizontal both at 1
Then click OK.

Next go to Image > Effects > Drop Shadow with the same settings.
Color: White
Opacity: 100
Blur: 1.6
V & H : 1

Save as a transparent gif and you're done : ) Not so hard was it : )

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