I'm trying to manipulate a word so I can simulate a 2 vanishing point perspective. How do I do that? I tried creating the outlines so I can free-distort each one of the 4 corners but when I do that and I try to use the direct selection tool, I can only move the newly created anchor points for the individual letters.
Use Object >> Emvelope Distort >> make with warp
I often draw a rectangle with fill& stroke of none behind my logo/type to distort, to the size of the undistorted background element. The no fill/stroke item serves as a good reference for the amount of warp to apply, and is a life saver if you later have a type change.
I believe it is under edit >> transform >> warp. You need CS2, I am working somewhere today with only CS1.
Tougher to do in photoshop as it works on only 1 layer at a time. In Illutrator you can distort whatever is selected,(preferably a group).