Firstly, you should open the sig/background you wish to add the text to:


Then select the font you would like (go to www.dafont.com to download fonts, and save them in your c://windows/fonts), and create the text.
I chose CType AOE:


Then right click, and select BLENDING OPTIONS, and apply the following settings:


Your final result should appear similiar to this:


NOTE: You may play around with any settings in the blending options, to apply different effects.