We demonstrate optical processing based on spectral line-by-line pulse shaping of a frequency comb generated by an optical frequency comb generator (OFCG). The OFCG is able to generate a smooth, broad, stable, known-phase frequency comb, which is ideal for recently developed spectral line-by-line pulse shaping technology applications. We demonstrate line-by-line pulse shaping on 64 lines at 10-GHz line spacing, generate transform-limited 1.6-ps short pulses at 10 GHz by combining two pulses in each period directly from the OFCG, and show various examples for optical arbitrary waveform generation. Further, we demonstrate that these pulse sources are of sufficient quality to support optical fiber communication applications as confirmed by bit error rate measurements.