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When you have a document containing a number of headings and sub-headings it can be useful to use Outline View to display only the headings of the document and to expand out the sections you are interested in.

To create a document outline you can either format the headings and sub-headings of an existing document using the Heading 1, Heading 2, styles etc or create a brand new document while in Outline view and use the Promote and Demote icons on the Outlining toolbar to set the level at which each headings should appear.

To change to outline view, click on View -> Outline, if your document contains text formatted with the Heading styles you will see the body text indented from these headings and you can collapse and expand the text under the headings using the icons on the Outlining toolbar.

The document above has been formatted using the Heading 1 style for the main heading MICROSOFT OFFICE and the Heading 2 style for the sub-headings.  If you want to collapse all the text under the sub-headings you can click the number 2 on the Outlining toolbar to collapse any text that is at a level less than Heading 2.

Each section of the text can now be expanded out by clicking the sign beside that heading or by clicking the icon on the Outlining toolbar while you are clicked on that heading.

Another useful facility when you are working in Outline view is the Document Map.  This also picks up the heading formats and displays a summary of the headings in a separate pane at the left-hand side of the document.  To display the Document Map, click on View -> Document Map.

You can quickly jump to a heading in a large document by clicking on that heading in the Document Map.

To assign an outline level to a paragraph without changing its formatting to one of the Heading styles you can change to Print Layout view (click on View -> Print Layout) and then select the paragraph you want to format and click on Format -> Paragraph

Use the drop-down arrow beside the Outline level box to select the level that you want to apply to the selected paragraph and then click OK.  Here is our document with the last paragraph set to Level 2, notice how this paragraph now appears in the Document Map as well: