The type size determines how large the type appears in the image.
The default unit of measurement for type is points. One PostScript point is equal to 1/72 of an inch in a 72‑ppi image; however, you can switch between using the PostScript and traditional definitions of point size. You can change the default unit of measurement for type in the Units & Rulers area of the Preferences dialog box.
The type you enter is rendered in the current foreground color; however, you can change the color before or after you enter type. When editing existing type layers, you can change the color of individual, selected characters or of all type in a layer.