Conditional formatting allows cells in a spreadsheet to be formatted based on their values. This lesson teaches how to apply, modify, and delete conditional formatting rules to highlight interesting or unusual cell values and visualize data. There are several conditional formatting rules including highlighting specific cells based on values, highlighting top/bottom values, using data bars where bar length represents cell value, and applying color scales with gradients. Applying conditional formatting involves selecting cells, clicking Conditional Formatting, and choosing a rule.