.....after thought..... make a guide layer with crosshairs, for aligning things. Turn off visibility for that layer before saving..........
use the polygon tool ("fill pixels"), number of sides = 12, set to "star", indent sides by 98%
start in the centre and drag out horizontally with the shift key depressed
| I agree; Corel is best for it, any thing you create in it is created as an object ( including numbers and letters) and as such can be easily placed anywhere by dragging them or bent, twisted, stretched, etc,etc............ |
All this can be accomplished with PSP also.

is #7 incorrect?
| is #7 incorrect? |
Sounds like a good idea to me ....... Explaining things like this are the hardest part.. there are many ways to do something, but one must come up with his own preferred method.
PSP can also rotate around the center of the canvas, much like paxx suggests. You just have to explore your tools and options..... 
Here is a quick tutorial for you. Looks more complicated than it is. I takes about 5 minutes really to do.
First, making sure you're justified Center in the options toolbar, place your first number at the 12 o'clock position, exactly in the horizontal middle of your clock (I used a guide to make sure). Note that I also drew a black dot in the exact center of my clock. You'll see why after.
Then, just to make the whole process quicker so I don't have to redo this 12 times, I am creating a custom action.
In the actions palette, create a new action. In the dialog, name it whatever you want. You can always delete it after you're done. I called it "rotate". Then press "Record" and Photoshop will start recording every single thing you do.
Make sure you're on your type layer, and type Control+T (free transform). Notice the little target symbol in the middle of your selection? That's the center of your rotation.
Hold the ALT key and drag it in the exact center of your clock (that's where the black dot becomes handy). And then in the tool options at the top, for the rotation angle (look right under this, at the very top) type 30 (30 degrees is 1/12th of 360). Click in your canvas so it's selected not your toolbar, and press Enter.
OK, I forgot one screenshot. But I think you can understand without an image. Now, your type is roated, not straight. So you need to straighten it out. Press Control+T again and type -30 for the rotation angle. Press Enter. Now you're straight and you're done.
Press Stop in your actions palette. Select your "Rotate" action and press Play 11 times. Tada!
You only need to raname your types 1, 2, 3, etc.
Now, my problem here is that I started too high. If you start your first character with a reasonable space between the clock edge and your number, it should be fine. But in my case, to make it look better, I linked all my type layers, pressed Control+T again, and while holding Alt+Shift, I dragged a little inwards to move the types a bit away from the edge.
That's it. No more than 5 minutes. The actions will work for you. 
As for linking the layers, click on one layer first, then for each other number layer click on the little box next to the eyeball icon in your layers palette (see my screenshot, where you see a chain icon).
Hope this helps.
Wow paxx! What an excellent tutorial!
Wish I looked at this thread 30 minutes ago...I *just* made a clock in PSP (though I also have PS) for WorldTime OD icon...I ended up just eye-balling the positions between the 12,3,6,9.
Turned out okay for my own use. Thanks again, will have to give it a try.
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