This tutorial will show you step by step how to make a cool looking sword in photoshop. To accompany this tutorial I have made a winrar video (avi,divx, 8mb).

Make a new file, leave room for mistakes.
Create a new layer.

Make a circle with the circle selection tool.
Right click and select "stroke".
Select a dark gray and, Stroke IT!.

Use glaussian blur so that it fills most of the circle.
Smudge it if needed so that it's not a perfect white circle in the center.
Use Filter-> Noise-> Add Noise to make it look more realistic.

Use the line tool with anti-alaised checked to make little spikes above it.

Make a new layer.
Use the rectagle tool and make a rectangle.
Stroke it like never before, errm I mean, before.

Use the line tool again and zoom in.
Try to mimic this effect. Anti-alaised is essential, but you might be able to use add noise.

Use the airbrush to shade it light gray on the side.

Make a new layer.
Use the free form selection tool to make a funky looking shape.
Fill it with white with the paint bucket tool.
Filter->Blur->Glaussian Blur to around 1.4, or as much as makes the edges a little fuzzy.
Go to filter->render->lighting effects and mimic the image settings.
Finally go to image->adjustments->curves and mess with it until it looks all metallic and cool.
Try inverting it too to see if it looks better.

Stare at it blankly.

Use the free form selection tool and make a blade outline.
Follow the same steps as step 8.
Follow the same steps as step 9.

Use ctrl+I to invert, might look cool.
Ctrl+B can change the color.
Merge layers.
Pat yourself on the back. You made a sword.