Using the tools in Photoshop CS3 requires you to find and learn a 3D program to get the effect you're looking for, but you CAN get there with Illustrator CS3.
I did a couple of tests, and was about to launch into a full-blown tutorial, but I recalled seeing Bert Monroy doing something of the sort, and found the video on Revision3.com. Most of it's not totally relevant to your problem, but it's all useful stuff, and you'll need the info for what follows:
Set your text and convert it to a Symbol.
Create either a squat cylinder from a circle (using Effects > 3D > Extrude&Bevel) or a ring, by drawing a short vertical stroke and using Effects > 3D > Revolve, with an Offset of 200 pt (or whatever gives you a good size ring). Bert uses a cylinder, but we're going in a slightly different direction here.
In either case, play with the perspective and angle until you have the illusion of distance that you're looking for. Here are the settings I used for the Revolve version, so you can see the angles, perspective, etc.:
It doesn't much matter if you have a cylinder or a ring, just so you have a circular wall to put the text on.
- Still in the 3D dialog, click on the Map Art... button. Add the text symbol to the correct face in the dialog. Bert's video gives you a great introduction to this dialog, and it's a lot better shown in a video than I could do here with screen grabs. When I was setting up my example here, I had to rotate the text 180 degrees (because of how I'd set it up in the first place) to get it to show right-side-up in the render.
Here's what mine looked like before turning on the "Invisible Geometry" checkbox:
Save the AI file and bring it into Photoshop as a Smart Object.
Style and mask to taste. My quick-and-dirty test image is here:
This isn't a fancy demonstration, due to time constraints, and it's certainly not the only way to do this, but it should give you some ideas.