Kind of difficult to see what that effect does from the screen shot, but I will give it a try
Now, it seems as if the letters all keep the same width at least, it is the height of the letters that is changed.
It looks a little different to a normal sine scroll and I'd guess that the letters are being scaled vertically and not just sined!
And it looks more complicated than that still... The sine curves run smoothly through the line of text and so it brings me to the solution.
You need to have two sine waves and they both need to be slightly different so that the letters will stretch in between them.
You can use something called linear interpolation to stretch the scroll in between the sine waves. (see the pic below).
Again, working across the screen for each point of the sine wave you subtract the top from the bottom to give the size of the gap.
You then scale the strip of letter to fit the gap, drawing the top bit of it at the top wave.
This is assuming that you have a command in PB that lets you stretch sprites. (I believe that drawimage does???)
If you don't have that then you will need to stretch them manually and that means dividing the height of the letter by the size of the gap to get the value to interpolate by, it's a very simplified version of texture mapping.
But to put it as simply as I can, you need to think of this effect as stretching the letters to fit the gap between two sine waves.
