On PHPMaster.com there's a recent tutorial from Martin Psinas about how you can add text to an image with the help of Imagick, the image editing software that's available to PHP via an extension.

In a previous article, Timothy Boronczyk wrote about how to create watermarks with Imagick using an overlay image. In this article, I’ll show you how to achieve a similar effect using plain text.

He takes a sample image (a headshot) and offers two versions of the same functionality - both the shell command (using "convert") and the PHP code that sets up the font to use, adds placement and pushes the result back out as a PNG. He also includes two other types of overlay - a font mask for a more see-through look and a tiled version, overlaying the text all over the image.