How to Vertically Stretch a Block of Text?

\usepackage{graphicx}
...
\scalebox{1}[3]{hello}

As David already stated in his answer the standard package graphicx provides the macro \scalebox{<h-factor>}[<v-factor>]{<content>} for this. The grfguide manual explains this and similar macros in detail. One thing to remember is that the content is boxes as horizontal box, so it can't include line breaks etc. except if you include a minipage, \parbox or similar construct.

There is also the \resizebox{<width>}{<height>}{<content>} which allows to scale text to a specific width and/or height. Use ! for the dimension you don't want to specify but to scale according to the other dimension. The starred version \resizebox* will scale the totalheight instead (height+depth).

There is also the adjustbox package which extends graphicx by providing a general key=value interface. Using this package you can scale even complicated content easily.

\documentclass{article}
\usepackage{adjustbox}
\begin{document}
\adjustbox{scale={2}{3}}{Text}

\adjustbox{width=\linewidth}{Text}

\adjustbox{minipage=10cm,scale={2}{3}}{Text\\with\\multiple\\lines}

\begin{adjustbox}{minipage=10cm,scale={2}{3}}
    Text\\
    with\\
    multiple\\
    lines
\end{adjustbox}

\end{document}

In ConTeXt

\scale[sx=1,sy=2]{Some Text}