Open image you want to create effect on.

Click SELECT>ALL, and press ctrl+j to Create a new Layer
Now create another layer 'layer 2' and place between the 'background layer'
and 'Layer 1'
With the type tool, enter the type you want to use.

Now click SELECT>>INVERSE or (Shft+Ctrl+I) to inverse the selection.

Fill the selection with Black, Opacity = 100%, Mode = Normal.

Inverse the selection again. you should now have a selection of the type only.
Save the selection as channel 4.

return to the the Layers pallet and make the 'Layer 1' active.
Load the selection Channel #4 then press delete.
Keeping channel #4 active, make the 'Background Layer' active.
Lighten the Background Layer by selecting
IMAGE>>ADJUST>>BRIGHTNESS/CONTRAST, set the values to your liking.
Return to 'Layer 2' and deselect the type.
Select FILTER>>BLUR>>GUASSIAN BLUR. For the example,
I used a value of 2.5.

Using the move tool, nudge the Layer up, or down. left, or right.
Play with the different settings to get the best effect for your application.