Hi Found this tut yesterday, but did yellowman's first and posted it already.
Lia1979, I started out with a canvas twice the size of my image; 1000x300 PX and I used a very large font; Bumbastika. I realized that my letters were not going to fit, but finished anyway. I made another that looks more correct but, I like this one better.
You can use any size of canvas you wish, I just usually use 512 for tutorials and tryouts.
As for text fit and size, it depends of the font you use, again you can choose any font or size you wish, for this tut big chunky letters work best.
As the zoom blur makes letters wider you have to leave some space around the text for that. If it is easier you can always work on bigger canvas with a lot of space around the text and then when you are done crop it down to smaller size.