For this example our old plague has been subjected to the elements. The wood texture although old was still clean. A grime image has been applied overall as a shader, except the missing 'R', adding a nice subtle green/brown 'dirt'.

[1]  The techniques used are the same as for 'Using Tiles and Backgrounds 1'. But because we need the letters to look old they need to be roughed up. First a mask is created  (see Quick Tips) from the text (ii),  which then has the sharp edges rounded off by smoothing the mask by about 5 pixels (Photoshop: Select>Modify>Smooth. Photo-Paint: Mask>Shape>Smooth). A new layer/object is then created and the selection filled to produce the new letters (iii). The original letters can now be disgarded. Now the edges can be roughed by using the 'Jiggle' filter included in the Eye Candy Filter set (iv). The bubble and warp adjustments are set very low, the twist slider to maximum and movement type to bubbles.  We can now apply texture and bevels as in 'Using Tiles and Backgrounds 1' (v). 

[2] Here the letter 'R' has been selected, cut and pasted as a new layer/object. The remaining letters have had Rust 01 applied and embossed using the Eye Candy Inner Bevel filter. Wood-Rough 02 has also be added as the background. 

[3] To create the clean letter 'R' area of the background the 'R' layer/object is used to create a mask to copy and paste that section of the wood.

[4] For the shader a nice grimey background is copied and pasted as a new layer/object. The merge mode is set to Multiply for this but Overlay, Soft Light or Hard Light can also be used for slightly different effects. Its best to experiment with the modes for each individual project. The opacity here is set to around 50%. Only a small section of the grime image will be used but it can be moved around to find the best part to use.

[5] The final steps. Left, with the grime shader applied over, both the background wood and lettering, the clean 'R' section layer/object can be brought to the front. Now add the letter 'R' stud holes using the normal brush tool in black. Do this on a new layer/object not only in case of mistakes, but also, so a white drop shadow offset by 1 pixel can be applied for a highlight. Right, four Artshop wood screws are added and given a fairly wide central drop shadow in black for an added grimey look.