Start with a new RGB image, with a white background and black foreground. Using the type tool type some text. If you are using Photoshop 4.0, just hit Ctrl-E to merge down the type layer (Cmd-E on Mac)
Duplicate the image (Image/Duplicate...). Now you have 2 images one is Untitled-1 and 2nd one is Untitled-2. Switch to second image and blur it using gaussian blur (Filter /Blur /Gaussian Blur...). Set setting to 3.0. Now Filter /Other /Offset.. 3,3
Now switch to the first image and go to Image/Calculations... Change the settings to match the image shown below. (It is important to use Overlay mode here.)
Add some colors here too. Go to Image /Adjust /Hue /Saturation., click Colorize checkbox and play.