Yes, you are missing something. Partly having to forget PhotoShop practices.

In Gimp however, it seems like the text is automatically rasterized. The problem comes in when i want to resize the text.

Providing you keep your image (save it) in Gimp .xcf format, a text layer remains a text layer. That is one that shows a big 'T' in the layer dialogue. It is rasterized by applying some sort of transform, shear for example. Even then it is possible to return to a 'T' text layer, however all formatting is discarded.

If i try using the transform tool to resize text the quality of the text degrades tremendously.
I Basically have to retype at a larger size. Is this really how gimp is or am i just missing something?

Do not use the transform tool.

With the text layer active and using the text tool (1) as in screenshot

All the text can be changed in one go, size, font, colour, using the text tool options (2)

Part of the text can be changed by selecting the part required and using the on-canvas dialogue. (3)

a demo, a bit old but at least I kept it short

http://www.youtube.com/watch?v=ChcTE9KROmc&hd=1

rich: www.gimp-forum.net

Not using transform tool is not an option because the text property box doesn't let you adjust the horizontal scale or the vertical scale.

You are up the proverbial creek then are'nt you

Not using transform tool is not an option because the text property box doesn't let you adjust the horizontal scale or the vertical scale.

The only way you will keep the text as a vector is to put the text to a path.

Then you can transform the path, turn it to a selection, fill the selection. That keeps a clean outline but it is not editable as text. Change the text and you need to start again, new path...etc.

Probably why I use Inkscape for deforming text. export as a svg, open in Gimp.