Question about kerning small text in PS7

Okay... I checked the memories section on text effects and couldn't find an answer to this one. I'm making an icon and want to put a word at the bottom in Georgia at a very small size (between 6 and 8pt.) I tried clicking in the character palette but it won't let me adjust the kerning. The whole kerning menu is grayed out and the only thing I could select is the 0 in the middle.

Is there something else I need to do (other than put the cursor between the letters) before I adjust the kerning?

Any information would be very appreciated. Thanks.