sundaridevi - 1:35 am on Oct 23, 2010 (gmt 0)
rocknbil started to talked about it but didn't give all the details. To get sharp text in Photoshop, make sure the canvas is set to mode=16bit and the resolution to 300dpi (150 dpi works too but not quite so sharp). Photoshop text created at 72dpi will never look as sharp as vector text from Illustrator.
From there you can play with your compression settings