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In this tutorial, Clay Preston teaches how to use shading and highlighting in Word. He starts by selecting a color for shading, preferring yellow. To shade, he explains to choose the bucket tool, which colors the entire line. For highlighting, he shows how to select the desired word and use the paintbrush tool, emphasizing that this method only highlights the chosen word, not the entire line. He concludes the video by encouraging viewers to leave a like and subscribe if they enjoyed it.