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In this tutorial, Bruce Byfield demonstrates how to prepare labels in LibreOffice using the label tool. He explains the various ways of entering text for labels, different options for labels, and how to edit labels before printing. To create labels for printing, a separate document must be created by opening the label dialog window. This tool can be useful for various purposes such as addresses, name tags, postcards, CD inserts, transfers for t-shirts, and custom stickers. By following the steps shown in this video, users can effectively utilize the label tool in LibreOffice.