This due to a corrpution in the Adobe preferences file. This file is found in different places depending on your version and OS. It looks like you are using CS 2 or 3, so do a search in Windows File Explorer for: Adobe Photoshop CS2 Prefs.psp
When you find it, make sure Photoshop is closed, and delete that file.
Photoshop will automatically make a new version when you next open the application (note that any other preferences you had saved will also be lost, but at least that problem with the text should be solved).