Start with a font and type a word.  I picked Burlesque because it's a nice thick font.  A brownish red color provides a better look than a bright red.

As the letters are typed, they are added to the Objects Palette.  Click on the Group button so that the entire word is selected.  Click the Adjuster Tool and click inside the word (touching one of the letters) to resize it.  Hold the Shift key if there is a desire to maintain the same height to width aspect ratio and grab one of the corner handles to resize the word as wanted.  This would be a good time to save the file. To paint on the letters, they have to be either be collapsed or dropped.  Collapse will only allow the letters themselves to be painted on and will not allow anything to go beyond the borders of the letters.  Dropping the letters will make them part of the canvas so that the letters can be distorted.  Click the Drop button.

Click on the Brushes tool in the Tools palette.  Pick the Liquid Brush and the Distorto variant in the Brushes Palette

Distorto is one of the Liquid Brush variants and acts a little like Kai's Power Goo which stretches an image in the direction that the cursor is moved.  Obviously, downward strokes are used to simulate dripping blood.  I dropped size down a bit so that more droplets could be added  Strokes should be varied so that it doesn't look artificial.

Things look a little flat in 2 dimensions, so it's time to Apply Surface Texture, one of Painter's most interesting features.  Surface texture adds a 3 dimensional look to things and allows applying all kinds of other effects. Surface texture could be added directly to the text, but would also warp the space around the letters to some degree. To avoid this, select the lettering first.  Since the letters are a single color, this is an easy task.  From the Select Menu, choose Color Select. Use the cursor to click in the red area  in the drawing (the cursor should turn into an eyedropper). The default extents should be fine (they usually have to be adjusted with a more complex image to limit what is being selected). Click OK and the "marching ants" dashed lines should be surrounding all the selected letters. A tip for people with slower computers, use Hide Marquee on the Select Menu.  Be patient because complex selections can drastically slow down the computer and it may be seconds before a click on the menu bar takes effect.  Don't click anything else until the menu pulls down.

Go to the Effects Menu.  Click on Surface Control. Click on Apply Surface Texture.  There wasn't much need to play with the sliders.  The immediate effect by upping the softness already provides a nice 3 dimensional look to the lettering.  Click OK to save the improved lettering.

Since the letters are already selected, now would be a good time to save them as a transparent GIF file so that they can be used on a web page just like I've done with "Scary Titles".  Click on the File menu. Click on Save As.  Click the pull down menu for Save As Type and choose GIF.  This brings up an additional menu as shown here.  Make sure there is a checkmark in the Output Transparency box to build a transparent GIF.  Picking the right Number of Colors is an iterative process.  The fewer the colors, the smaller the file, and the less time it takes to download the image.  Click the Preview Data on the bottom to see if the image looks right as both a transparent image and with the number of colors applied.  If no image can be seen, the graphic probably isn't selected correctly. Click OK to save.