The video shows two different ways of blurring the highlights of an image similar to the way the Adobe After Effects blur effect works.
The first method is simple: you just apply the diffuse glow filter, which might be hard to find. You can get it in CS6 by going to the filter gallery and looking under the “distort” category.
The second method gives better results in my opinion, but takes a few more clicks. It involves making a copy of all the highlights of the image in order to give them a separate gaussian blur. This is similar to an inverted compound blur in AE.