I need to have some text overlay some footage so that the footage is only revealed inside the letters of the text. I set the text as a luma matte and that does what I want except that it makes the colors in the BG footage desaturated. What am I missing?

What software are you using?

Oh yeah heh - After Effects 7 pro.

Where is your text coming from? AE? Photoshop?

if the text is floating in space (no background color on it), switch to an alpha matte, that'll use the shape of the letters rather than the brightness.

The text is created in AE. Only the luma matte shows the footage thru the text. The footage turns out monochrome =/

The trick turned out to be that I needed to set the luma mask on the footage and have it use the text as a mask - not the other way around.

glad you figured it out...these things are frustrating when you KNOW something should work and it won't cooperate.