Looks like a frame by frame hand drawn/painted animation. I'm afraid there's no easy way to achieve it, just a lot of manual work. For alternatives, you can always look at animated fonts. These guys are pretty awesome: http://animography.net/
You might want to look at the use of shape layers to morph into the letters.
Johnny Cuevas, Editor
"I have not failed 700 times. I have succeeded in proving that those 700 ways will not work. When I have eliminated the ways that will not work, I will find the way that will work."
---THOMAS EDISON on inventing the light bulb.