Leading is the space between lines. Positive values will place the text below the line while negative values will place it above the line. Working with text on a curve, you will eventually run into the problem where the letters will overlap each other as they bend around the curve. This is where Kerning comes in handy. Kearning is the space between the letters.
Higher numbers increase the space between letters, lower numbers decrease it.
In the example, I had the Auto Kern check box to use the default kerning values. For now, if you just click on the Standard Text button, a nice flat text in the color displayed will appear on your circle. In the Create As box, select the Vector radio button and make sure that Antialias is checked. Locate the layer that contains your text and vector object. If you've followed this example you should only have a background and one layer.