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In this video tutorial, Steve Patterson from Photoshop Essentials demonstrates how to create a popular effect in Photoshop - placing an image inside text using clipping masks. He explains that this process is simple and easy with Photoshop, using any recent version. Viewers can also access a text version on the website for step-by-step instructions. The first step is to open the image to be used, make a copy of the background layer, and continue with the tutorial.