Half Circled Text with Color Background

Ok, I want to do this in Photoshop CS5:

  1. Create text in a half circle with no distortion. The current text tool does not work at all and only produces very bad distorted letters when applying settings like arc, lower upper, etc.
  2. Create a background color around the text exactly like what occurs when you use the text tool to highlight it (and it turns black with white lettering). Right-clicking on the text when highlighting doesn’t provide any new options for selecting the text’s background color…so I’m lost.

I know how to do step 1 with paths and everything no problem. The problem is creating the background color. I can’t find it in layer styles…anywhere. The only way I’ve figured out how to do it is create a screenshot of the highlighted text and copy/paste it into the image and transform it…which proves to be of seriously bad quality (which I want to avoid).

So how do I create a simple solid color background behind the text after highlighting it?

For the text:

  1. Select the Ellipse tool and select Paths (it defaults to Shape layers I think)
  2. Hold shift and draw a perfect circle
  3. Delete the bottom anchor point or necessary line segents until you have a half circle remaining
  4. Select the horizontal type tool
  5. Click on the path where you would like the text to begin
  6. Type away

For the background:

I just did a rough version using the Rectangle tool and manipulated the points via the Direct Selection tool and by moving the tangent lines until the rectangle was ‘banner-like.’