After much searching and snooping and deducing I have come to the conclusion that Photoshop 7 and under cannot do this cleanly….but….there is a work around that is sufficiant for my purposes anyways…lol. This work-around distorts the text slightly but I can live with the amount….lol.
If you have photoshop cs , here is a great video tutorial (for text on a path) and another one here (for text on a closed path), or this one using the marquee tool ……but if you are like me and have 7.0 you can do the following to acheive a “similar” look.
Create a new document, select the Text tool, type your text. Choose the move tool and center your text where you want it. Select the Text tool again and choose the “create warped text” button along your top toolbar….looks like a T with a bent bar underneath it .
Choose arc and horizontal and run the “bend” slider up to 100%….this will produce the first or top half of your circle. Select OK and choose the move tool and center your arc where you want it…. now duplicate this layer (choose layer, duplicate layer), for this duplicate layer choose edit, transform, rotate 180 degrees. Now choose your move tool and move this layer down so that your circle is complete!!