Photoshop CS3 added a live overlay of the cloning area. The implementation was a little awkward. Photoshop CS4 makes it a lot easier to see a live preview with the Clone. The same is true for the Healing Brush tool, also.

To add a live preview, you need to go to the Options panel for the Clone tool (or the Healing Brush tool). Click on the tiny icon to open the Clone Source panel. It's the tiny icon at the extreme right.

The setting to select is called Clipped. Just make sure the check box has a check mark. You'll be able to see the clone preview inside tour brush shape as you move it about the image.

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