When you are watching a movie, click on the "Create Snippet" link to the right of the video screen.
From the Snippet creator, you may select a portion of the movie by clicking and dragging the orange bars on either end of the clip. To preview the clip, click the play button on the left side of the screen.
You may change the name of the clip by clicking on the pencil icon next to the title.
Then you may either save the Snippet for later (you can find the saved clips in Create => My Snippets) or share with family and friends via Email, Facebook, or a unique link (using the buttons on the right side of the screen).
NOTE: Creating a Snippet does not alter the original movie, it creates a new clip that is saved in My Snippets.