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I wanted to take this old picture of my Dad with my daughter (and my weird "end table") and put the curved text on it. Here is how I did it.
Open the photo in PSP as in the first picture above.
Add a new vector layer (Layers/New vector layer) and you have this.
click the Preset Shape Tool:
and choose the circle (if the tool palette does not show, Tools/Palettes/Tool options will turn it on) and draw the circle on the photo and drag it to fit:
You can tilt the oval with the handle in the oval or drag it to fit where you like it best.
Selections/Select none to remove the handles from the oval
View/Palettes/Layers will show you the various layers; hold the mouse over one and the content of that layer will appear.
Click the Text Tool (the big "A") and the Text Tool tool bar will show:
Change the "Create as" to "Vector" and then click in your photo and the Text Entry Window will pop up where you type your text; then click OK.
Move the center of the + of the cursor on the edge of the oval and see how the "A" changes to an "angled" letter "A" with an oval below the "A" and click there to bring up the Text Entry window. Click the oval at about the center of where you want the text. If you don't like the result, Edit/Undo.
When you have typed your text, click OK.
You can use the handle in the middle to move the text around to suit.
For the ellipse layer, remove/click the eyeball to remove the ellipse.
Layers/Merge/Merge all (flatten)
Save your new image with a new name.