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In this video tutorial, Steve Patterson from Photoshop Essentials demonstrates how to create an image inside text effect using Photoshop. By utilizing clipping masks, this popular and classic effect can be easily achieved. Patterson uses Photoshop CC but mentions that any recent version will work. Viewers can access a text version of the instructions on the website. The first step is to open the desired image, make a copy of the background layer, and begin the process of placing the image inside the text.