Chipped Type

1. Create a new image, and use the Type Tool to create some text. If you are using Photoshop 5.0 or later, right click on the T icon on the text layer, and select Render Layer.

Next, holding down Ctrl, click on the text layer to select it's transparency.

Press Q on the keyboard to enter Quick Mask Mode.

2. Press Ctrl+I to invert the mask.

Now, in the menu go: Filter > Pixelate > Crystallize...

Crystallize by 10 pixels, and hit OK.

3. In the menu, select: Image > Adjust > Brightness/Contrast...

Drag the Contrast slider to 96, and Brightness to -75 and hit OK.

Press Q, on the keyboard, to exit Quick Mask Mode.

In the menu, go: Edit > Clear Deselect Ctrl+D.