"Highlights" is actually more of an umbrella term for several different techniques. Still, it basically comes down to selecting sections of hair and applying a lightener to give the hair depth and dimension. For example, both the traditional use of foil and balayage, a freehand technique, are forms of highlighting.
The traditional foil method consists of your stylist sectioning off your hair, applying the lightener, and then wrapping the hair in foil. This allows the lightener to penetrate the hair by generating and conducting heat deeply. One drawback is that foils can sometimes leave a visible line of demarcation. To soften the look, your stylist will often perform a color melt or root smudge.
Balayage does not use foils. The stylist directly paints the lightener onto the hair sections freehand. The result is natural-looking, gorgeously blended highlights. Because it's quick, easy, and provides stunning results, balayage is growing in popularity. A similar technique foilyage combines both the foil and balayage methods for a completely different look.
If your client is looking for a high-impact style that adds dimension and depth, highlights are the way to go. The technique used will depend on the style the client is looking for. As a professional hairstylist, it's important to ask your clients the right questions to help determine the proper technique to use.