I know I'm always stretching when I come up with names for text effects but we'll just call this one Funky Marshmallow! Actually, it kind of reminds me of a cross between the Michelin Man and Oreo cookies - I have a feeling that's just me though. Oh well, there's a lot of steps to this one, or at least a lot of Filters, so I thought it would be easier to just provide the PNG file for you to download.

Important Notes: This PNG file requires Fireworks CS3 or later since a couple Photoshop Live Effects are used as well. The font in this example is Poornut and can be downloaded for free from Fonts101.