1.  In Photoshop open a 320x200 canvas with black background.
2.  With the Type Tool create a white letter approximately 75 points high.
3.  Go to Layer/Type and select Render Layer
4. Flatten Image in the Layers fly-out menu.
5. Select Channels tab (next to Layers) and select “load channel as selection” icon at bottom of window.  White letters will be selected.
6. Select “Save selection as a channel” icon.
7. Save as a 32 bit TARGA file.  (This file will include an 8 bit alpha channel to cookie cut the letters into a background.)
8. In 3D Studio open the Materials editor and create a new material using the 32 bit TARGA file you just saved. Click on the box to the right of the diffuse color patch for that material.  Select Bitmap and then your TARGA file.
9. The resulting material will allow the underlying color to show through as background.
10. If another material is required as background use the Mix material type.
11. Select a new materials window and select the box to the right of the diffuse color patch.
12. Select Mix material
13. In the Color One Map slot select a map from the Maps sub-directory
14. In the Mix Amount slot select your TARGA file with Alpha channel.
15. I texture of background is need in letters add a bump map using the same background file.