I was trying to create a logo in Illustrator (I wanted to stay in IIllustrator rather than Photoshop so the type would be pixel-based for good resolution at any size) with an inner drop shadow (somewhat like the Ai logo) but can only acheive the effect in Photoshop. Is there any way to do it Illustrator?
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You will need to create some kind of blend (or gradient) shadow if you want it to be vector-based. I don't know which AI logo you're referring to, but create the shadow as a blend and then mask it using the letter itself would be my advice without actually seeing the sample.