Egg Bram teaches you how to create a cut text effect in Xara Extreme. Create a simple colored rectangle and add some text on top. Then select these two objects and go to Arrange - Combine Shapes - Subtract Shapes. Now the two objects have combined into one. Although the text appears to be white now, if you move another object underneath you will notice that the text is transparent. You can also add effects to this new objects, like a contour or a shadow.