Tyler, try resetting your prefs by holding the control-alt-shift keys when starting Photoshop.
Change the resolution of the image:
Image » Image Size
Turn off (uncheck) Resample Image
Change the Resolution to 72 pixels/inch
Are you sure you had the text selected when you tried to change the point size?
Regardless of resolution, invoking a type layer should produce the point size specified. So 12 point type could be 12 pixels high at 72ppi or 50 pixels high at 300ppi. Either way it is still 12 points. Changing file resolution will not change type size, just the number of pixels used to render said type.
The real question here is what is the image size of the file being worked on? If it is really low resolution and the whole image is displayed at a large downsampling ratio, then the type will naturally look tiny. What do the rulers look like?
ID. Awe , thanks so much. That did the trick. Thanks everyone else too.
Tyler, you may have inadvertently set something incorrectly or the pref file was corrupted. Don’t forget to set your colour management back.
I suspect it was the resolution settings in the New Canvas dialog box – and while resetting the prefs worked, it was probably unnecessary (as that should only be used as a last resort).