Photoshop :: Text In PS Appears Fuzzy - Why Not Smooth Vector?

When I put text into photoshop CS3, and then zoom into it, the edges are all fuzzy and jaggy.

I was of the opinion that all text were vectors in PS and so the edges should be smooth as. Unfortunately, the text prints out all jaggedy on my laser printer also just like it looks on the screen. I've also played with the anti-alias options somewhat. Obviously when I do this in Illustrator, it is spot on vector, but not in PS.

What am I doing wrong here? When I convert the text into a shape, sure... the nice vector lines appear around text. But shouldn't the text be vector straight up when I create a text layer in PS, and then I should be able to rasterize it when adding filter effects etc?

Is there any way for me to work with my text in Photoshop in sharp vector-resolution so that it's sharp at all resolutions? Let me describe a test I've done:

I open up a A4 300 ppi resolution document in Photoshop and simply type the word "Photoshop" at 72pt size Myriad Pro font. The anti-aliasing is set to 'Crisp'. Firstly, it doesn't look the best as it is on the screen with the edges 'jaggy'. Secondly, I hit print and it tells me I'm printing to a non-postscript printer (i.e my laser which I know IS postscript!!). When it prints out, it looks crap just like it did on my screen (edges jaggy).

I then open up a simple A4 document in Illustrator, type the word "Photoshop" at the same size text as outlined above. Looks great on screen OBVIOUSLY because it's vector-based and is sharp at all resolutions. I hit print, it it spits out the document perfectly printed as it is on screen.

I don't know if anyone else is experiencing this with Photoshop, but my text looks garbage only when using Photoshop. Not with any other program out there (ie. MS Word, Publisher, Illustrator, Serif Drawplus, Serif Pageplus, Serif Photoplus....)