• Start with any background texture or color.
• Create a new layer.
• Select type tool , Type some text on it.
• Fill the selection with white and then save the selection.

• Now select all (CTRL+A) and apply
  Guassian Blur. Filter > Blur > Guassian Blur
  enter value 3.

• Create a new layer.
• Hit CTRL+ALT+4 ( This loads the saved selection again ) and fill it with a color or texture of your choice.

Optional Tip:

• To add a 3d effect, I applied Eye Candy Carve Filter.