Comics have dialog bubbles but that just going to mess up the picture because it will cover part of it. Is there a technique i should use to position bubles so that they dont interfere?

The only tip I have is...when you set up your scene, make "throwaway" space.  That means, render an area into your scene that's there specifically to be written over.  That doesn't work in every scenario, of course, but it helps in some.

an alternative would be to use something like the Gimp or Photoshop, and make the bubbles slightly transparent, and make them a separate layer over the original picture.

Smaller fonts might allow you to make smaller bubbles, but as with anything else, it's a compromise between legibility, and background...

JenX is correct.

That is where the skill of storytelling meets art and is crossed with technical ability.

I use Pakled's method. What I do is create my speech bubble, and then make it at 67% transparency (arbitrary number, I know.. but it's what I keep with).

As for the speech bubbles themselves, I draw them on a separate layer by doing a circular selection to make the oval, use the polygon selection tool to get the triangular part to point to the character, and fill that selection with pure black. Then contract the selection by 2 pixels, and then fill that with white. Then just use the Blur More, and do the transparency thing. Bingo! :D

Quote - I use Pakled's method. What I do is create my speech bubble, and then make it at 67% transparency (arbitrary number, I know.. but it's what I keep with).

As for the speech bubbles themselves, I draw them on a separate layer by doing a circular selection to make the oval, use the polygon selection tool to get the triangular part to point to the character, and fill that selection with pure black. Then contract the selection by 2 pixels, and then fill that with white. Then just use the Blur More, and do the transparency thing. Bingo! :D

Since I want to do comics too, could you demonstrate this method with a short Tutorial?
DPH

 When I started Liquid Stealth (examples in my gallery here), I too, didn't want to cloud up a composition with a lot of speech balloons.  As I started with narration it was easy to squeeze that at the top or bottom of frame. But once, dialogue came into the story, the text had to go somewhere and it had to easily correspond to the character speaking. I tried doing the transparent bubble to minimize impact.

As Jenx said, plan less detail for where its needed or you'll need to blot it out. Text without the bubble often just ends up being hard to read. 

In the future you could invent hot spots where the bubble would pop up only if you hold your cursor over the character and disappear when the cursor moved away. 

Really advanced would be to cue a sound bite to play when you click on a character then your image would be text free.

Quote - Since I want to do comics too, could you demonstrate this method with a short Tutorial?
DPH

I'm gonna be heading to bed real soon, and I've got work kinda early in the morning, but I'll whip up a quickie tutorial when I get out of work, and I'll link to it here.

Woo, never done a tutorial before! :o

Thumbnail drawings will help you to plan your layout so you'll have an easier time deciding where to put balloons. It'll also help in clarifying panel sequence and storytelling.

http://wonderchef.pridelands.org/Renders/Test/TextWalkthrough/

I'm sorry it's not the prettiest of tutorials... but there we go. I tried to make it as good as possible. If there's any questions, feel free to ask here, or even send me a private message.

whew...got me out of a jam. I have the Gimp, so I couldn't show you squat about Photoshop...I know it does layers...but how....;)

Yeah... I haven't used the Gimp since 2001... so some know-how may be needed for using the given steps in another program, but the basics still apply, of course. :>

Pfftt, and I'm far from an expert. Heck, I got my degree in Digital Media.. haven't been able to do anything with it as of yet. c.c

Quote - > Quote - I use Pakled's method. What I do is create my speech bubble, and then make it at 67% transparency (arbitrary number, I know.. but it's what I keep with).

As for the speech bubbles themselves, I draw them on a separate layer by doing a circular selection to make the oval, use the polygon selection tool to get the triangular part to point to the character, and fill that selection with pure black. Then contract the selection by 2 pixels, and then fill that with white. Then just use the Blur More, and do the transparency thing. Bingo! :D

Since I want to do comics too, could you demonstrate this method with a short Tutorial?
DPH

There's actually a better method than that (if you have Photoshop).

1.  Create your text on a new layer over the background (which happens by default), format it and so on.
2.  Create a new layer between your text layer and the image.
3.  Create your speech bubbles/thought balloons/textboxes by whatever method you like on the empty layer.  For dialogue, I use the method mentioned (oval selection, add a small tail to the oval, and then fill it with a solid colour).
4.  The end result should be an empty layer with assorted shapes that will be the background for the text.
5.  Now the neat trick: go to the Layer Styles for that layer.  Select "Blending Options" and a new dialogue pops up.  If you click the checkbox next to "Stroke", all your shapes are automatically surrounded by a smooth back border.  If you highlight "Stroke", various options pop up including the width of the border, colour of it and so on.  Et voila, smooth black border around your speech bubbles automatically.

You'll notice that the Blending Options also provide settings like glows and drop shadows, which could also be useful for this sort of thing.  This image shows how it works: the title includes stroke around the letters and a glow, while the text box has a stroke around it and a subtle drop shadow.