The Smart Punch command simplifies the task of punching one or more vector shapes into another. Normally, selecting several shapes and then clicking Modify > Combine Paths > Punch results in just the topmost path being punched into the bottommost one. The other selected paths are ignored. And punching with text doesn't work at all. You first need to convert it to a path, ungroup the paths, union them into a single path, and then punch.

With this command, simply select two or more objects and run Smart Punch. The bottom-most object will be punched by the upper ones, even if they're blocks of text or groups of paths. The punch target can also be a block of text, which will automatically be turned into a path before punching.

Smart Punch goes beyond just paths and also allows you to punch into, and with, bitmaps. For instance, select a block of text and a background bitmap, run the command, and transparent pixels in the shape of the text will be "punched" into the bitmap. Or create an image with the bitmap brush tool, position it over a vector rectangle, select both and run Smart Punch. The opaque pixels of the bitmap will be punched out of the rectangle path.