This is not a tutorial that is going to throw around terms like "ligature" and "kerning" and "tracking" and so on. For those kind of typography basics you can read elsewhere. My purpose is simply to make you aware of the existence of the character window and to show you that working with type in Photoshop is not as complicated as you might think.
So for the sake of demonstration, I took this photo of my daughter's stuffed dog (who apparently can't rest without a sleeping mask)...
and then I took a random "sleep"-related quote (by William Blake, I think) to use as text. I have pretty ambivalent feelings about the result, but it does show that you can manipulate text in a lot of ways without even creating a bunch of different text layers.
There is a good chance that you don't have the handy little "character" window visible, so first you will need to make sure it is selected from the window menu:
The first thing I do is simply enter the text in a size you can read. Don't worry about formatting yet:
I decided to highlight "Think" and increase the font size.
(Note: You aren't stuck with 72 pt as your highest setting. You can type any number at all in the box)
Then I did the same for the other imperatives and also added a return at the end of each sentence.
At this point, I know I will want to make more changes (colors, fonts, etc.) I know that the automatic spacing between those returns is not to my liking, so I can highlight those four lines (I could just as easily do two or three) and make adjustments. Make sure you highlight what you want to change first:
Now, instead of "auto," I can adjust the settings from the pull-down menu or type in whatever number I want:
Look what happens when I set it at 20 pt:
And here is what 72 pt looks like:
Type in various numbers and you quickly get a feel for the effect.
Not only can you adjust settings of individual letters and words, you can even select and adjust the spaces between words. You really just have to experiment, as I did below:
There are all sorts of cringe-worthy errors that I'm sure you typographers are noticing (but seriously, if you're a typographer, why would you still be reading this?), but hopefully my little tutorial has helped demystify that character window.