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In this video tutorial, the narrator explains how to enable auto recovery in Photoshop CC versions and recover lost files. They demonstrate how to access the auto recovery feature in Photoshop preferences by going to Edit, then Preferences, then General, or by using the shortcut Ctrl + K. Users can choose the frequency of auto-saving recovery information, but this feature is only available in CC versions and not in older versions like CS6 or CS5. The options range from every 5 minutes to every 1 hour.