Here is the thing, unless we are talking headline or large text, typesetting in photoshop is never a good idea. That being said, if document should be at least 300 DPI minimum if you are going to print. if you are set up as 72 DPI, it will always look like garbage.
Now, if you can keep your text vector based (I know you can in Photoshop CS, than your ok, but if you flatten your work to make a jpg or eps, than you stuck.
If you are typing in a size, like under 20 points, it will never be perfect.
Are you doing this for the web or print?
Jeff
http://www.willinois.com