Step 1: Create a brand new document of a suitable size with a single background layer filled with a solid black colour (you can change this later - the black just makes the first few steps easier). Use the horizontal Type Tool to create a word in pure white. In my case I've used the 'Eras Bold ITC' font at size 110. Don't worry if you don't want to use this particular typeface - just select something with a solid bulky look (script-style fonts rarely work well).

Step 2: Open up the image you want to use as a separate document, Select > All using the main Photoshop menu, and click Edit > Copy to pop the image into the clipboard. Close the document and go back to the one we were working on in Step 1. Select Edit > Paste to put a copy of your image into a new layer on top of all the others (with the type layer immediately below it in the layers palette).

Step 3: Now all you need to do is select Layer > Create Clipping Mask (or CTRL+G on the keyboard) to group the image with the text. And there you go - a simple yet beautiful text object cut out of an image.

Variations: It should be remembered, of course, that this effect is not complete in itself and needs further personalisation before it looks professional. Layer effects are particularly good additions, as the example to the left shows. Also remember that you aren't limited to text. In fact, any solid high contrast shape will work just as well.