Making a webcam overlay

[Blighty]

1) Make sure that there is an alpha channel
Layer > Transparency > Add Alpha Channel
If it is greyed out there already is an alpha channel

2) Use the rectangle tool to draw a rectangle selection
See image below

3) Edit > Clear or press the Delete key

4) Use theText Tool to create your text.
The text will be created on a new layer

5) SAVE as xcf. EXPORT as a png (jpg does not support transparency)