Understanding the layer styles engine is a really useful skill to have as the uses for this are endless. Here I will explain how to use it effectively by creating a bubble style text effect which will not only be transparent but will also the color of anything behind it. FULLVIEW
For this tutorial I will be using a pattern I explain how to create in another tutorial, available here so follow it up to step 5 to create the pattern. However feel free to experiment with other patterns you have available.
Create a new document at 1000x200px then start by creating a text box (T) that covers the whole width of the document then, using arial black or another thick font, add your text. Highlight the text then go window>character to bring up the text settings panel. Make sure center justification is selected then the font size to 120pt and the horizontal character spacing to 100. Note that the color of the text does not matter here as we will be changing this in the next step. The extra character spacing is to allow for the outlines we will add.
Now in the layers panel, select the text layer then under opacity the fill opacity to 0% and you will notice that your text will become invisible. The fill opacity controls the opacity of the layer but not of the layer styles. Now we will add the layer styles so right click on the text layer and select blending options then the settings until they resemble the images below and use the colors specified.
shadow: color: #df0073
Outer glow: color: #348c15
Inner glow: color: #c4beff
Bevel and emboss: highlight color: #ffbee0? ? ? shadow color: #00db00
Color overlay: color: #ff9600
Pattern overlay: use the pattern you created, see introduction for more details.
Stroke: color: #00db00
Your image should now look similar to below, try experimenting with the colors used here by moving only the hue slider on the right when selecting the colors. When using the blending options it is often better to ignore the name of the property as that is only a guide, for example we used a shadow and an outer glow here to mimic a stroke. Blending options can be a very powerful tool if used in this way.
Now we will add a highlight to the text, to do this we want to create a highlight then mask it with the text layer so that the highlight will not affect any background we decide to use. The complication here is that if we were to make a selection using our text layer then the strokes that we added round the text will not be selected, try Ctrl+click on the text layer to see what I mean then deselect (Ctrl+D). The way we are going to tackle this is, first duplicate the text layer (Ctrl+J) then right click on this layer and convert to smart object then right click again and rasterize layer. You will notice that the text has d colors, don't worry this will be hidden. Now create a new layer (Shift+Ctrl+N) then select the elliptical marquee tool (M) and draw a selection like the one shown below.
Now to fill our selection we will use a gradient as this will give a better effect than using a solid color. Firstly we will set up the gradient so select white as the foreground colour or just hit D then X. Select the gradient tool (G) then in the gradient editor select the second gradient which should go from white opaque to white transparent. Drag the gradient from the bottom of the selection to roughly the top of the document page then the layer opacity to 50%. Now we will use our new text layer to mask this layer so hold Ctrl and click on the newer text layerr to make a selection then select the highlight layer and go layer>layer mask>reveal selection. Lastly hide this text layer then optionally you can click the chain link in the highlight layer then move this layer and the original text layer into a new group, this means that if you want to move the text you can move the group and the highlight will follow as well as being able to move the highlight individually.
As far as the text goes, we are finished although I will quickly explain how I made the background. I first pasted in the image of the field above the background layer then created a new layer and went to filter>render>clouds and d the blending mode to screen and the opacity to 75%. You will notice that the text was almost all created in the blending options dialog, with a bit of knowledge of these layer styles work and a lot of experimentation it is possible to create very complex, good looking text effects.