The talented Katrina of Pugly Pixel has a great little screencast on her blog showing how to create a letterpress look using photoshop. She explains that there are a lot of letterpress-inspired tutorials out there but the one's she's seen apply inner shadows to the text and explains "that inner shadows are just one component of a letterpress look — there’s also the indented, pillowed-look to the paper when it’s been “pressed”. Katrina addresses this in the tutorial by applying the bevel/emboss layer style to the paper texture, in addition to a few other things. Click here to see.