The Text tool allows you to create an element that contains formatted text. When first selected, a text box will be automatically created for you (you can resize/move it as you wish). The tool also allows you to drag out a text box if you wish. To enter text, simply type the text in the text box. If you wish to move the text box, click and drag in the gray frame that surrounds the text itself.

The Font Size option allows you to specify the pixel size of the text. There are also buttons provided to allow for left, right, or center alignment.

Some standard text options are provided, such as bold, italic and underline. Multiple formats are supported in one text element, you can select a portion of the text and change any option (except for alignment) for just that selection. Elements drawn with the text tool can have a drop shadow applied to them, and you can also bevel/emboss them.

There are 2 buttons at the bottom of the text control panel, titled "Resize Bounds" and "Distort Text". What happens when you resize a text box is determined by which of these options is selected.

This will allow you to change the bounds that contains your text, without changing the size/shape of the text/font itself. This will affect how word wrapping occurs if your text is too big to fit on one line. If your total amount of text contains more lines that could fit in your resized bounds, the excess will simply be cropped away.

This will allow you to distort/stretch the text itself. Word wrapping and line placement will not be affect by the resizing. Instead, the text/font itself will be stretched so that it can fit within the box. No cropping will occur with this option when the text is resized smaller.