There are lots of fonts and filters great things you can use to dress
up the look of your text BUT you need to start with a nice smooth
non-jagged text as a base to build on.
.


The look of your text is simple to control with a few easy to do
adjustments. First ALWAYS and I do mean always increase your
colors to 16 billion. A jpg is already but a gif is not and all
chat avatars are in the .gif format or they wont work. you decrease
the color when you save it as a gif its automatic.so be sure if its an avatar
you save it as a .gif

Follow the settings on the screen shot to set up your basic text.
REMEMBER to open/use your tools you will need an open graphic.
The ANTIALIAS is what gives you smooth text. If you put a dark
color in foreground/stroke and a lighter in fill/background it will
give you a nice outlined kind of look. Under name you will find the
fonts listed on your computer and size will allow you to adjust the
letter size of your fonts.if you need a size not listed you click on the
size box hilighting it and enter the size you want to try manually using
your keyboard numbers.
On the right the B = bold text - thicker darker
The I is italic = lighter slanted text
The U = Underlined as you can see I used it on the word antialias in
the screen shot.
The A = draws a line across the center of your text
The next 3 are alignment settings for placing your text align left, center
and right the one I used is depressed it is the center text option

Remember the above is set for BASIC TEXT as with anything in PSP the best thing  is
DO NOT BE AFRAID to play...test the tools see what you can do.
One tip here... many over the years have repeatedly lost their fonts in PSP
the reason is to many fonts.to correct it you need to delete unused fonts but
DO NOT EVER delete ANY RED FONTS. and while you dont have to it is a
good idea to keep arial and a few of the microsoft fonts they are default fonts
and work for everyone. Custom fonts only work on web page if the
viewer has the font.
I love fonts and I use two types ...fonts that are for my web pages including
dingbats and larger fonts and text/avatar fonts that are good for business
letter writting, tutorials and avatars. They are fonts that look good in smaller
sizes. I keep most of my fonts that i add (did not come on my puter) in folders
on my desktop. When I need one for a project I go through the fold / find the
font I want/ leave it open on my task bar/ note the name go into PSP and it will
be in your font list where it says NAME just click on the arrow to open the list
and scroll till you locate it. Select it and use as any other font. close it and it is not
in PSP or installed in your windows system. Doing this will save you alot of problems.

BE sure to check that your antialias stays checked. I have found that if I use large
72 plus sizes it sometimes unclicked.and for odd other reasons unknown to me.

Good Luck if you are working on your own. If I am here and you need help please ask.