If you need to do circled text in Photoshop 5, here's a way.

Make a new 200x200 image. Make sure Rulers is on and Snap to Guides is checked under the View Menu.

Stroke a Elliptical marquee about 2 pixels in the middle of the image. This is how: Select the Elliptical Marquee, then with a black foreground, go to Edit>Stroke and enter 2, dot center and click OK.

Click on the Rulers and drag out 2 Guides, one Vertical and one Horizontal. Line them up in the middle of the circle, they should snap into the correct place.

Use the Type Tool and make the first letter of the word. Place the Letter on the very top of the circle like I have.

Go to Edit>Free Transform. Now set a new point of origin by clicking and dragging it to the middle of the circle like I have shown. It should snap in the very middle of the circle.

Now just rotate the letter and it should ride along the circles edge. Don’t worry to much about the placement of the text, we will get to that in the next step.

Continue Step 4 on thru a few times until you have the full word.

After I was done, my text was not centered on the circle. To fix this, I linked all my Text Layers together, then went to Edit>Free Transform once more, dragged the point of origin to the middle of the circle, then rotated the text so it was centered on the top.

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