I can't even remember the amount of times I've been asked to do a tutorial on this effect. You could create those Rap type diamond effects using the noise filter, however this technique creates a more interesting result. This is the original Tutorial on this effect, there have been several Rips of it in other places.
Begin with the text you want to turn into the gold and Diamond "Iced
Right click on the layer palette and choose Rasterize layer.
This will make the text editable.
Make a selection around the text (Hold down Ctrl/CMD and click on the layer thumbnail)
Press "D" to reset to default colors
If the render menu is not available make sure you are in RGB mode.
Now this is where we create the diamond effect.
Choose the tiny lens texture and scale it down.
Use the settings as shown here.
Click OK to apply
Please note, in CS3 the diamonds look gray and not silver. If this is the case, take this additional step:
Choose Curves (Crtl/Cmd+M)
Grab the top right point (or the white triangle at the bottom) and drag it across to the left until your diamonds look like the bright ones here. If your diamonds already look like the image, skip this step.
We now have the diamond covered look to the text. Its common to have a golden border with this effect.
Apply a layer style to the layer, choose stroke.
The important things here are:
Position = Center
Fill type: Gradient, choose the default copper setting
Make the size 10
Click on the Bevel and emboss option
Choose "Stroke Emboss" this will apply the bevel to the stroke we just made.
Crank the Depth up and set the size for the same as the stroke:10
Change the gloss contour until you get something that looks nice and metallic.
Here we have our basic effect. We just need to adjust the color to make it look more like gold.
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Apply a Hue/Saturation adjustment layer and push the saturation all the way up to 100
Tweak the hue until you get a nice gold color.
Last thing we need to do is add some sparkles.
Load the assorted brush set that comes with Photoshop. (Click the arrow at the top of the brushes palette and choose load brush on vs. 6 :: On Vs 7 just choose assorted from the menu. When prompted select "append")
Choose the small starburst.
Make white our foreground color
Create a new layer and "dab" in the sparkles with the paintbrush tool.
Here I added a gradient background to set it off.
Have fun with this one and don't keep the neighbors up! This tutorial is featured on my Photoshop Secrets FX video.