This is a really cool way to swirl text and also use a tool that you probably don't use too often Polar Coordinates.
Step 1: You'll want to choose a font that is bold for this effect to work best. I chose Compacta Bold. Type a word and then rasterize the text.
Step 2: Next select the text, I used ctrl key while pressing the layer thumbnail on the layers palette.
Step 3: Go to the Select menu at the top of Photoshop and choose Modify->Contract. I used a pixel contraction number of 2, but your results will depend on the resolution. Use your best judgement to achieve the results as shown below.
Step 4: Delete the middle out.
Step 5: Flip the text 90 degrees clockwise.
Step 6: This is where it gets fun. Go to Filter->Distort->Polar Coordinates and choose "Polar to Rectangular"
Step 7: Go to Filter->Stylize->Wind and choose "Wind" and "From The Right".
Step 8: Go to Filter->Distort->Polar Coordinates again and choose "Rectangular to Polar" this will reverse the effect you applied earlier.
Step 9: Now just flip back 90 degrees counter clockwise and the effect is complete.
