Cool-Text used to indicate in their FAQ that they used a web based script called GIMP..."The Gimp is an image manipulation program" which they customize to create the type of graphics that they offer on their site. I don't know if they still use that...
There are many other similiar sites such as Flaming Text that use this same program - GIMP, but I don't know what the other free online custom graphic sites use...
Dlynn ~SitePoint Moderator~
PawPrint Designs by WebKat
"Let's keep Ethics on the Web"
The GNU Image Manipulation Program (aka GIMP) is fully scriptable from the command line with its scripting language, named Script-Fu. So their script probably just sent generic commands to the GIMP and filled in some variables like the text, font, shininess, etc.
It's not hard if you're good with the GIMP and Linux. Things like these are what make Linux (and any other OS like UNIX) great.