The pictures inside the letters are illustrations not photographs and really they are just a matter of creating them if you have the skill or find them on a clp art website or something like that.

Here's instructions for putting them in the letters (without cropping and thus destroying the illustration layers)

This should actually be fairly easy. You set up the type itself the way you like it with the stroking and other stuff you desire to make it look the way you want. Bring in your pictures that you want to use in the letters. Make sure the picture layers are just above the text layer in the layer pallet. Holding down the alt/option key (on a mac, not sure what the equivalent is on the PC) move your cursor to the line between the text and the first picture layers in the layer pallet. you'll see the icon change to two intersecting circles with an arrow next to it. Click when this happens and the image will appear to be inside the text. I'm not sure what this process is called but there you go. You'll repeat from the Holding down the alt part selecting the line between the first and second picture then between the second and third picture etc till all your images appear in the text. The images will be in actuality unaltered and can be moved around at will within that text.

Hope this helps