  Recent results are reported showing the effects of thermal pairing in highly
excited nuclei. It is demonstrated that thermal pairing included in the phonon
damping model (PDM) is responsible for the nearly constant width of the giant
dipole resonance (GDR) at low temperature $T <$ 1 MeV. It is also shown that
the enhancement observed in the recent experimentally extracted nuclear level
densities in $^{104}$Pd at low excitation energy and various angular momenta is
the first experimental evidence of the pairing reentrance in finite (hot
rotating) nuclei. In the study of GDR in highly excited nuclei, the PDM has
been extended to include finite angular momentum. The results of calculations
within the PDM are found in excellent agreement with the latest experimental
data of GDR in the compound nucleus $^{88}$Mo. Finally, an exact expression is
derived to calculate the shear viscosity $\eta$ as a function of $T$ in finite
nuclei directly from the GDR width and energy at zero and finite $T$. Based on
this result, the values $\eta/s$ of specific shear viscosity in several medium
and heavy nuclei were calculated and found to decrease with increasing $T$ to
reach $(1.3 - 4)\times\hbar/(4\pi k_B)$ at $T =$ 5 MeV, that is almost the same
value obtained for quark-gluon-plasma at $T >$ 170 MeV.
