First, type out the text you want to chip. Next, hold the control key (or the apple key, if you're into that sort of thing) and click on the text layer to select it. Now, hit q to go into quick mask mode. The mask should cover everything but the text. Use the crystalize filter (under pixellate) at a radius of around 10 pixels. Hit q again to go back to the normal mode, copy the selected area, delete the old text layer, and paste. The text should appear looking something like chipped stone.

A second method.

1. Create your text
3. Convert your vector text to a raster
2. Select a textured eraser brush
3. Delete willy nilly around the edges
4. Use the Blur Tool over on the text, and select blur all layers. Blur the edges you used the eraser on, this will give it a more natural look.

Now you can be proud of yourself.

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