I love Xara 3d. Best all around 3d-text creation software there is available. You can make things like this [webmasterworld.com] (60k) in 12 minutes. (it would have been faster, but took me 5 to decide on the save format;)
<pun intended>Cool 3D is cool</pun intended> I enjoyed playing with it.
I also have tried one that is put out by Electric Rain called FontFX [erain.com] . It is pretty slick also and the price was right. When I purchased the program they even pointed me to a sub url to get 8 more "material packs" (read: background images).
I use MSIC occasionally to overlay text. I don't like creating a graphic with it because it usually insists on saving a transparent gif in a 216 color pallette, which usually messes the graphic up. I'll only use it to overlay text when I can save it with the pallete that came with the picture. The button maker has proven to be handy, too. I think it's a little more intuitive than the PSP.
Although, I have found many of the effects available in PSP (or an available PSP plug-in).