There are many applications for this
technique, called Clipping Masks: here is one of the most popular.
Note: A Clipping Mask is simply grouping two layers. The clipped
layer is only visible where it intersects the base layer.
1. Open a new image, make a new layer, and drag
and drop a photo onto your canvas.
2. With the Text tool, click on the canvas and
type your text. A bold, fat font works best. Pictured is Aharoni
Bold, but there are many others that are similar. Here I added
a Stroke Layer Style to give the letters a black outline.
3. If your text is on the layer above
the image, move it below the image by clicking and dragging the
Text layer thumbnail below the image in the Layers Palette.
4. To make the clipping mask, go
to Layers>Create Clipping Mask, or type Ctrl-G, or Alt-Click
on the line between the two layers in the Layers Palette.
5. Now resize your image to fit in
the lettering better. Here I resized and duplicated the layer
and moved it over to give more coverage. Remember to add the Stroke
Layer Style to the text layer if you want an outline.