I never had this problem before, but it just randomly started happening. Whenever I make a big font (not even big, like size 30 or something), it distorts the font and it's not smooth at all. It always used to be fine, I'd use size 80 font and it'd be smooth, now it looks all pixellated. Any ideas? Thanks.
Yeah, I would experiment with the anti-aliasing. Beside the font size dropdown box in the toolbar there is the antialiasing feature. Options include sharp, smooth, strong, crisp and none (which you might have accidently changed to).
I'm guessing either this graphic is too small or saved to pegs. Never really liked how photoshop saves files for web. Illustrator/fireworks rule this field.