Start a new RGB document (size around 600x600) filled with black background.
- Use the type tool and create a new text in WHITE and position the text centered in the lower half of the document.

Now create a new empty layer by clicking on the create new layer icon.

Now Press CTRL+ALT+SHIFT+E, this will combine all layers to the new layer.

Now roate the new layer 90CCW. (Edit->Transform->Rotate 90CCW)

Now apply the Wind Filter to this new layer (Filter->Styleize->Wind)
Method: Wind, Direction: From the Right.

Press CTRL+F 2 times to reapply the filter 2 more times.

Now rotate the image back to normal: Edit->Transform->Rotate 90CW

Now go to Filter->Blur->Gaussian Blur: enter 5.0 px

Now go to Image->Hue/Saturation
Check the "Colorize" Box. Set Hue to 40 and Saturation to 100

Now Duplicate this layer, to do this, right click on the layer and choose "Duplicate Layer"
You should now have this:

Now apply some Hue saturation to the new duplicated layer:
Image->Adjustments->Hue Saturation:
Set Hue: -40

Now set the duplicated layer's blending mode to: Color Dodge

Now go to Layer->Merge Down To merge the 2 layers together.

Now to create our flames, we go to Filter->Liquidfy. Now with the Warp tool selected, set brush size to between 40 and 50, and brush pressure to around 40 to 45.

Now just click and drag from the white edge of the text to wiggle your way into the orange to create the flame.

CLICK IMAGE TO VIEW FULL SIZE

Next, change your brush size to about 30, and pressure to about 30, and go for 2nd round of creating your flame.

Once your happy with your flame, hit OK.

Now move the original text layer to the top on the layers pallete, and change it's color to black.

Now go to Layer->Rasterize->Type to rasterize the text layer. Now use the Eraser tool and select the 200px SOFT brush, and erase out the top half of the text.

Now, if you want to create a reflection, do a selection about half of the bottom part of the flame.

Press CTRL+SHIFT+C to copy, then CTRL+P to paste this as a new layer.

Now go to Edit->Transform->Flip Vertical, Then use the move tool to move the layer down just below the text. Set this layer's opacity to 20%. You can use the eraser tool with 200px soft brush to erase out the bottom part of the reflection.

HERE IS MY FINAL (DOWNLOAD PSD FILE)