Step One
Let's begin by creating a new PhotoShop document and name it 'blood'.  Just to be sure you end up with the same results, try to follow the steps as closely as possible.  This technique will require a little different tweaking depending on what font you use, what resolution your document is, whether the final output is for screen or print, etc..  You may have to experiment a bit.  I started with a 8x5 inch, 72dpi, RGB Color document on a white background.

Next, you'll need some type.  I used a font called ITC Souvenir, 175 points, Demi (Bold), color black, Faux Bold selected (to make it as bold as possible) with crisp anti-aliasing.  I set tracking to -50 so that the blood letters will run together a bit.  Call me sick, but I like that.

You may not have all of these settings in your Type Tool dialog box, depending on what version of PhotoShop you are using.  I created this tutorial using version 5.5.  Try to use a heavy type face.  Make sure your type is large enough so that it doesn't get lost in the 'ooze' and become illegible.  Also, make sure to leave a good inch or so on each side of the letters as this effect will splatter a bit!

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