warp text error

I would reset the photoshop preferences by going to Edit>Preferences>General, clicking on Reset Preferences On Quit and restarting photoshop.

Do you have Faux Bold applied from the Window>Character Panel?

well the reason this is happening is because you are distoring the text, that is what text Warp does. However in this state it is still in Vector format, so its edges are clean, but in order to curve it, it has to be distorted a bit. 
If you just want text ON a curve you can create a new layer and either use the pen tool to create a path, or use the elliptical marquee to create a circle, and then right-click inside of it and select "Make work path" and then press ok.... then you can select the Text tool and hover over the path you will see a wiggly line show up, when you see that.... click where you want to add text... and Voila!

Hope that helps!

mark

What font and settings for warp are you using?