The ‘T’ I’m taking about is in the layer palette. It appears when you create new text layer. The title of this layer should be what you type in the text layer. You want to create a selection from the text (aka the marching ants). I don’t have CS3, but in CS 1 (and I think 2) this as an option when you right click on that layer. You can select the text using the magic wand tool also. My advice it to right click on that layer a few times and see if you can find that option (or something similar to it.) But the end result is that you have a selection around that text. You then want to reduce that selection. So the rest of the tutorial depends on executing that step.

Here is another thing you could try, With the text layer selected, go to Layer >> Type >> Create Workpath. You should get a path around the text. Right click on that path, with the “Path Selection Tool” (aka the black selector tool near the text tool) right click on the path and choose “Make Selection…”.

Tell me if this helps, Devin