The inline text variable tool is used to add patient specific information - for instance patient name, DOB, Address. These specific details are then filled out in each instance the letter is generated.
Adding an inline text variable to your letter template
To add an inline text variable place your cursor in the location you would like it and select the button from the top bar.
Then you can select an existing variable (you can add multiple instances of the same variable in the same letter) or create a new variable by selecting 'Custom Text Variable'. Once added you will see this appear as a pink block in your template. 
How do Inline Variables Appear in my Letter?
After generating a letter, you will see a box in the top left of your screen where you complete the variables in your letter. Complete each variable, ticking to confirm, and they will be updated in your letter.
The 'Send' button will be inactive and appear grey until all variables are completed.