Priority scheduling assigns priorities to processes and executes the highest priority process first. If processes have equal priorities, they are executed in first come first served order. The example document shows how priority scheduling works by assigning priorities from 1 to 5 to five processes, then calculating their waiting times and turnaround times based on executing the highest priority processes first. Round robin scheduling assigns a fixed time quantum to each process, preempting and resuming processes to ensure all get CPU time and avoid starvation. The example shows how time is divided between processes using a 2ms time quantum.