HOW TO "CARVE" TEXT, IMAGES, OR WHATEVER OUT OF STONE.
First, start out with the "base" image, that is, the image that you're carving whatever it is out of. I'm using the rock texture that I created; if you want to know how, then check out the tip.
Now, save the object that you're carving (I'll just say text from now on) as a .psd file. Now, displace the base image using that file.
Now, create an alpha channel in the base image (if you don't know how, I'd suggest reading the manual.) Copy the text into that alpha channel (just drag it.) Make sure that the text in the alpha channel is lined up with the displaced text. Now, working in the main RGB channel, render Lighting Effects, using the alpha channel (#4 by default, or whatever you named it) as the texture. Voila! You see below the finished image.