The "easy solution" I found is:
- Type your text in a Arabic compatible Word/text editor (like AbiWord),
- zoom in or use a large font,
- make a screenshot and paste it into Photoshop
Alternatively I found a Javascript/Photoshop solution from Google Code which is meaned for Mac, but they claim it should work for Windows too. He also mentions that you could use GIMP to create the Arabic text, just copy+paste it to Photoshop and you should be done.
Here's what Yaman says it does:
If you have had difficulties typing
Arabic text into Photoshop, I have
created a Google Code project to
develop an open-source script that
will provide a solution:
Arabic4MacPhotoshop. The Photoshop
Script that I wrote will enable
Photoshop users to create properly
shaped Arabic text in Photoshop
graphics.

Currently, Arabic text in Photoshop on
Mac appears as disconnected characters
in backwards-order (pictured to the
right). My script, which does not work
in all cases and may require some
additional fiddling on the part of the
user, will automatically convert
Arabic text you have entered into
Photoshop into legible Arabic script.
It will automatically remove all
diacritic marks from your text and
create individual text layers for each
marking, so that you can position them
in the correct spot above the
appropriate letter. Unfortunately, I
don’t know of any simple way to avoid
this extra step for the time being.

What this script does is evaluate
Arabic characters to determine what
the correct shape should be, whether
it is at the beginning, middle, or end
of a word, and what the preceding
character is. It then converts the
Unicode representation in memory to
the one for the specific ligature
rather than the base character. It
will then create a new Text Layer with
the “fixed” text, as well as
additional layers for any diacritic
mark (fatha, domma, kasra, shaddeh,
etcetera). If you wish to edit your
text after this point, you must repeat
the process and edit the original,
disconnected, backwards text, rather
than the “fixed” text. Otherwise you
will run into problems.
While this script does not solve all
issues, it provides an alternative fix
for probably an overwhelming amount of
Arabic work that needs to be done in
Photoshop. One solution for Mac
Photoshop users is this $1,700
modified application which supposedly
has completely integrated Arabic
functionality as well as other
features. I have never used this
program since it is more expensive
even than the original Photoshop. The
other option is to use the free and
open-source program the GIMP, which
works on Windows, Linux, and Mac, and
fully supports Arabic text.