Click the button with the "A" in the filmstrip. This is in the Viewer window, on the lower right hand corner.

In the pull down go to Text then to Text

You will now get this in your Viewer window, click on the Controls Tab

Here is where you can type in your text, change the font, size, style, alignment and so forth. An aside:

Use sans serif fonts, they look better. There are all of these fancy fonts, but they usually look lousy on the screen.

Now we are going to drag down the font onto the sequence. Click on the Video tab. The box right below the tab is the duration box, you can type in how long you want the clip to last. Also, make sure the window setting for the Viewer Window is set to Image.

From here you will click in the window and drag it to the timeline.

You text should appear over your video in the Canvas Window. Here you can position the text as well by clicking an moving it to the proper place. MAKE SURE that you have the clip here set to Image+Wireframe...remember this is the Canvas not the Viewer window.

If you want to add a drop shadow you will add that in the Motion tab of the Viewer window (yeah, doesn't really make sense, but that is where it is). Check the Drop Shadow box. These are the settings I usually use, but you can make you own!
Congratulations! You have added text!