Text Chat is accessible via the Popit. It brings up the PS3 standard on screen style keyboard. This is then displayed to all players with you in your Pod or level, and in your Player Colour. In LittleBigPlanet 1, if the player has popped and not reached a checkpoint before activating the Text Chat, the colour of the message is black. In LittleBigPlanet 2, however, the message is still the same colour as your popit.
If you have a USB keyboard hooked up to your PS3, you can type messages without needing to use the on screen keyboard. If there are multiple sackfolk playing on the same PS3, the speech bubble will always appear above player 1. When typing with the USB keyboard, the text chat popit icon does not appear above you sackperson, and online players do not see any indication that you are typing.
When you close a message that you have entered, it is added to an on-screen log of the conversation, which then disappears after a few seconds.
Depending on what colour your popit is, the text may be hard to read for other players. This is especially so with the white colour scheme, as the text colour does not change to show up against such a light background.