Use a canvas size a bit larger than the lettering you wish to create (to give yourself some 'elbow' room!). Color depth must be set to 16 million colors.
The other New Image settings can vary depending on the intended use of the lettering:
Resolution: 72 pixels/inch for use on webpage or email; a higher resolution if you will be printing a card or scrapbook lettering.
Background: Raster or vector. Color or transparent. If you select 'vector' background, it will be transparent. I prefer using a solid white raster background instead of working with the checkerboard (transparent) pattern. It can always be changed later if all work is done on layers separate from background layer.
