Follow along with yet another example of clipping, as in pasting an image into type. Though, we are going to do things a little differently. Create some intial type. Make a new layer and position the type on layer 2 close to the first type layer.

Click on the blank square next to the eye on the "Bow" layer to create a link. Access the palette menu and "Merge Linked" to merge the two type layers as one.

Open up the image you wish to place inside the type and drag it onto the type image.

Your menu should look like the one shown here. To create a clipping group, simply make sure the top layer is selected and press Cntrl +G.

For the drop shadow, click once on the type layer and use whatever settings you wish. Here, we resized the image and merged the layers (merge: visible).