Step 1.

Create a new 250X250 pixel document. Create any bright texture or good-looking background. Now type a text on it and duplicate the text layer ("Layer 1 copy") (apply Layer > Duplicate Layer...).

Step 2.

Go to "Layer 1" on the layers palette and rasterize it (apply Layer > Rasterize > Layer). Then apply Filter > Blur > Radial Blur with the following settings: Amount->100; Blur Method->Zoom; Quality->Best.

Pixelated Text Effect

Step 3.

Now apply Filter > Pixelate > Mosaic with the following settings: Cell Size->12 square.

Pixelated Text Effect

Step 4.

Apply Filter > Sharpen > Sharpen image and if you want you can add shadow. And that's it.

Pixelated Text Effect