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In this tutorial, Clay Preston teaches how to use shading and highlighting in word processing. He begins by selecting a color, opting for yellow. To shade text, he demonstrates how to use the bucket tool, which colors the entire line. For highlighting, he shows how to choose the text and apply the paintbrush tool, emphasizing that this option highlights only the selected word, not the entire line. Clay encourages viewers to leave a like and subscribe if they enjoyed the video.