Maybe I should write up a tutorial for booleans.  There are a lot of different things you can do to make them work and there are a lot of things you can't do with them.

The first sad and unfortunate thing you should know is that your UV mapping of your model is destroyed when you do this.  Carrara basically resets the whole texturing thingamadeal with a model when you do a boolean because C considers the new booleaned object a whole new animal.  Therefore, all texturing is blown away and you have to start over.  UV mapping is what you do LAST.

Now for this particular deal, I did several things to get it to work.  I'll summarize them in the following steps.

1.)  I created my text as a standard text object.

2.)  I converted the text into a vertex object.  You do this by opening up your text object in the modeling room, edit menu, convert to other modeler, select vertex and jack up the fidelity to max.

3.)  I inserted a primitive cylinder, went into the modeling room and did a convert to vertex model again (although no options when converting a primitive).  Now just for knowledge sake, opening up a blank vertex object and inserting a cylinder vertex primitive there is also just as good as this and a tweeny easier and I think you can generate better cylinders.  For those of you who are spline freaks (like me), you can create a cylinder in the spline modeler, set the surface fidelity up to a big number and convert it to vertex also.  The point is (sheesh!) that we're trying to get a cylinder that's a vertex object (dang we made it!).

4.)  I selected the cylinder mesh (ctrl a) and subdivided it.  I did this to try to get the cylinder mesh to have the same "density" of poly's as the text object.

Then I did a 3D boolean subtract and guess what, I had a small amount of goofed up poly's (dang!).

5.)  To fix this, I opened up the text object, did a ctrl a to select the whole beast, and subdivided it.

Then I did the boolean subtract again and poof, I got what you see here.

The main things of this little discussion to realize is that if you're going to do the boolean thing, you want to have the mesh density of all your objects to be about the same density and I find that I have more luck if all my objects are vertex objects to start with.

Sometimes, I just subdivide the areas where the boolean is going to occur (I don't subdivide the whole model).

Anyway, those are my general rules that I use for booleans.  There are a few other tricks and traps that are useful (tutorial time I should think).

Hope this helps,

-Kix