Going out of space with inset the Illustrator way
If you look carefully, you'll see subtle differences between the Photoshop version and this version, created in Illustrator. Unless I'm really missing something here, this effect is harder and less precisely achieved in Illustrator. I also think the end result looks somehow more crisp and sharp in Photoshop. Anyhow, I believe it is always interesting to see the same technique executed in both applications. In the end you can compare and decide for yourself what works and looks best. So here we go…
Background from outer space
This time I'm using Illustrator CS5. We'll start by creating a new document. Just like before I used the same measurements 927 px wide by 420 px high, and RGB as Color Mode (under the Advanced options). CS5 users should also makes sure to check the *wonderful* new feature 'Align New Objects to Pixel Grid'.
Select the Rectangle tool from the toolbox and draw a rectangle that has the size of your document. By default the object will have a white fill and black stroke. Set the stroke to no fill and the fill to black.
Add a new fill by going to the Appearance palette and choose Add New Fill from the palette's dropdown menu.
Choose one of the available gradient fills via swatch dropdown in the Appearance palette.
Now edit this gradient by opening the Gradient palette and clicking the swatches in the gradient to edit them one by one. The first most left one is black at 0% opacity, the second one, located at 43% (diamond slider icon) is 171 Red, 0 Green and 255 Blue at 50% opacity, and the last most right one uses 255 Red 71 Green and 0 Blue at 100% opacity.
Edit the gradient Angle to 25%.
Now we'll create the sparkles for the background. We'll do that by creating one sparkle and turn it into a symbol. First, create a new layer by clicking the Create New Layer icon from the Layers palette. Lock the layer that holds the gradient background for now. Make the new layer active by clicking it in the Layers palette, select the Ellipse tool from the toolbox and draw a circle (holding down the shift key).
With the circle still selected, go to the Gradient palette and choose Radial from the gradient Type dropdown menu. Select white and 100% opacity for the most left stop swatch and white with 0% opacity for the right stop swatch. Move the gradient location slider (diamond icon) to a position of 25%.
Now select the circle and drag it into the Symbols palette to create a symbol. In the window that appears enter the name 'sparkle' and click OK.
Double click the Symbol Spraying Tool from the toolbox and set the Density to 3. Now select the sparkle symbol from the Symbol palette. Start dragging with the mouse in random circles across the gradient background as if you would doodle. If the result is not really to your liking just hit delete and try again. The sparkles are all equal, but we'll create a bit of randomness in the next step.
In the toolbox under the Symbol Spraying Tool, select the Symbol Sizer Tool.
Make some of the sparkles larger by going on top of a sparkle and holding down the mouse button. Make some of them smaller by holding down the alt/option key.
Now select the Symbol Screener Tool from the toolbox in the same location. Go on top of some of the sparkles one by one and just click the mouse once to make the sparkle more transparent. This way some of the sparkles are brighter than others.
This might need a bit exercise to get the space background exactly the way you want.
Select the Type Tool from the toolbox and type your text. Now unlock the layer that holds your gradient. Select both the gradient and the sparkles. Make sure you have them all selected. Go to Object > Group (or hit cmd/ctrl + g) to group both together. Now select both your text and the grouped background. Go to Object > Clipping Mask > Make (or hit cmd/ctrl + 7).
As you can see the text stays editable. This is cool, isn't it :) I'm actually not 100% sure if this is also doable in CS4. So if this isn't possible, you'll need to convert your text to outlines first. Do this by selecting the text with the Selection Tool (black arrow) and go to Type > Create Outlines (or hit cmd/ctrl + shift + o).
Next I created a background under my text by creating a new layer and moving the new layer below the layer with the text. You can do this by simply selecting and dragging the layer in the layers palette.
Select your text using the Selection Tool. Go to the Appearance palette and choose Stylize > Drop Shadow from the Add New Effect dropdown menu. Select Screen from the Mode dropdown menu, 75% Opacity, 0 px X Offset, 2 px Y Offset, 1 px Blur and white as color. Check Preview to see the result. It could be that you need other values as it depends on how large your text is. Click OK.
Go to the Appearance palette and choose Add New Fill from the bottom of the palette. Select black from the fill's swatch options. Click the Opacity option and choose Multiply as mode and enter a value of 30% in the Opacity field.
Choose Stylize > Inner Glow from the Add New Effect dropdown menu. Choose Screen as Mode, choose white as color, 100% Opacity, 4 px Blur and Center. Check Preview to see the result. Because we choose white here in combination with Screen as mode, we don't get to see this and our clipping mask background is still visible. Using Black and Multiply on the fill reveals the effect that is more or less like an Inner Shadow. I say *more or less* because it still is an inner *glow*. We can't move the position of this effect like we can in Photoshop with Inner Shadow, which makes it more real looking. Here, because of our clipping mask we are more restricted and I didn't find a way to circumvent this.
Document Raster Effects Settings
After you are completely done, you can change the Document Raster Effects Settings to a higher resolution. You see, Illustrator is completely vector-based, which means you can resize your document anyway you want without loosing any quality. However, as soon as you start using these Photoshop effects like Drop Shadow, Inner Glow, Gaussian Blur,… you need to define the resolution you want it render in. Doing this at the end of your job is best, as it influences performance. So it's always best to work at 72 dpi, and then change this to a higher resolution at the end.
I would still without a doubt choose to do this in Photoshop instead, where the effects and text are still editable and flexible. Though, in Illustrator things are vector-based, but an effect such as Drop Shadow is not. Plus, this is the most important reason to me, you don't have the Inner Shadow effect in Illustrator. We have to resort to Inner Glow instead, and you just don't get the same result. The fact that we want to combine all this with a mask makes it rather more difficult and a bit more consuming as well.