This is fun. I am going to make a name with stitches around it. Just like the one in this layout.
I will show to you how I made this simple text effect and surely this will going to work with your layouts.
1. Open a blank document.
Go to FILE>New and make the following setting:
I use 800 x 300 pixels
2. Create a New Layer
Click the New Layer icon in the Layer palette or press CTRL+Shift+N in your keyboard. This layer is for a background to make your stitches visible if you want to your thread be white in color.
Click the foreground and I set it to #004a80. Then press ALT+Backspace to fill the layer.
I applied texture to the filled layer to appear it as a canvas. Go to FILTER>Texture>Texturizer. I use the following settings:

3. Make your text
Click the Type tool in the tool palette and I start typing a name.
4. Select the text
Select the text by pressing CTL click directly on the text layer and you will see the marching ants over the text indicating that it is being selected.
5. Create Work Path
While the text is selected, go to Path Palette and click the Make the Work Path from the Selection icon found below the Path Palette.
The text now will have a white line around the text, meaning it is now the work path I made out of the selection.
6. Add another layer
Create new layer and name it as “stitches”. This will be your stitches layer.
7. Set your brush
With the Stitches layer selected, set now your brush. Click your Brush tool in the palette or press B in your keyboard. . In your brush list, look for the V or X shape brush. But this time I will go for the V shape one. If you do not have this V shape brush, you can make your custom brush. Well I am lucky because I already have a downloaded freebie stitch brushes from http://www.aneesah.pixelled.com/.

To display the brush setting window, press F5 or go to WINDOW>Brushes
8. Create now your stitches
It is now time to create the stitches. After I have set the brush, click for the Pen tool or press P in the keyboard to switch to pen tool. Then go to the text in the working area and right click to anywhere in the white line around the text. This will display:
Click for the Stroke Path from this drop down menu.
Select the brush and uncheck the Simulate Pressure.
9. Delete the work path
I can now delete the work path. And there it is, my stitch name.
Practice now your name. Start stitching your name or any other text or even your image, you can stitch them around, too. Happy reading!