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1. Start with a blank canvas and fill it with whatever color you like
2. Type your text and position it in the center of the page
3. Use the Rectangular Marquee tool while holding the shift key, to make a square around the text. It's important to make sure it's a square and not a rectangle or the text won't form well into a circle.
4. Once text is selected, choose Filter ---> Distort ---> Polar Coordinates
5. Make sure Rectangular to Polar is selected and click OK
Instructions for Photoshop: It is done pretty much the same way in PS as it is in PS Elements. You will get a prompt when you use the filter to rasterize the text. You just need to make sure to rasterize text but everything else is done the same way. There are other ways to do this in PS. You can put text on a path but this is the easiest way to do text on a circle and have it look like the example.
Instructions for Paint Shop Pro: (I am still new to PSP but I think this is the easiest way to do this)
Create a new file and use the custom shape tool to make a circle. Make sure to hold the shift key down so the circle will be symmetrical.
Use the text tool to write your text on the circle. Make sure that the A has a little semi circle under it, otherwise the text will not be along the circle.
Type your text
Then expand your layer palette and hide the circle by clicking on the eye ball.
If you convert the layer to a raster layer it will become one layer.
(If there is another way to do this in PSP or an easier way someone else can feel free to add to this thread)