I am trying to embed a picture within a logo. The text is fairly large size (probably going to be 72pt) and I'm trying to take a picture and have it be the size and shape of the word. I want this to be scalable and look good on the web so should it be done with vectors or bitmaps? Anyway, I have acess to illustrator 10 and photoshop 7 and gimp. Any advice would be greatly appreciated, thanks.

If you want an image to scale, then it has to be vector. You cannot, however, vectorize a photo, so if you're going to use it for multiple purposes, you're going to need multiple versions. You can scale DOWN a photo w/o too much loss, but you can't scale UP.

If you want the photo to look like it's inside the word, you need a clipping path.