cut out / masked text effect

[Bob]

Open your Image (Layer 1)

Add a layer (Layer 2)

Write text on layer 2 (color doesn't mind)

Select outside the text with the magic wand -> All but the text is selected.

On the layers window, click on Layer 1 (One). The selection remains.

Delete it (Edit > Delete).

Delete the Layer 2 layer. (Layers > Delete layer)

Or there is also a alpha mask plugin somewhere.

[BoltBait]

I want to take an image; create a new layer, put some large block letter text on the new layer, and then do a mask between the two somehow so that I end up with block letters made up of the background image and erase all of the rest of the image so that it looks like the image I referenced.

So, do it!

Almost exactly what you said:

1) Open a new photograph. It shows up in the "background" layer.

2) Create a new layer, call it "text"

3) Select the "text" layer and fill it completely with black

4) Select white for your primary color

5) Add your text to the "text" layer

6) Change the blending mode of the "text" layer to "Multiply"

7) Image > Flatten

8) Magic wand the black area and press the Delete key