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In this video, Phillip Burton demonstrates how to replace a part of a string in programming. He starts with a string, “hello there philip,” and shows how to change it to “hello there john” using the replace function. He emphasizes that to use this function, you need the initial string, the text to find, and the text to replace it with. Phillip notes that this method is often utilized for placeholders, like replacing a hash sign with names in large datasets. He hints at further examples, suggesting the function's versatility for handling multiple names in strings.