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Hidden Power SupportSupport and discussion area for Richard Lynch's book and software series
you need to run that on a text layer. You either have a text layer that is not the active layer, or there is no text layer. This must be a defined text layer, not one with rasterized type.
It was probably something as simple as: you created the layer, inadvertently activated another layer while opening the Effects palette, and tried to apply the tool. Easy enough to do. Glad it was easy to locate the trouble!