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In this tutorial, Clay Preston teaches viewers about shading and highlighting in Microsoft Word. He demonstrates how to choose a color for shading using the design option, selecting yellow as his preferred choice. To apply shading, he recommends using the bucket tool, which colors the entire line. For highlighting, he shows that by selecting a word and then using the paintbrush icon, users can highlight only that word with their chosen color, such as yellow, without affecting the entire line. He concludes by encouraging viewers to like and subscribe if they enjoyed the video.