He sat reading a newspaper.
He, reading a newspaper, sat.
Reading a newspaper, he sat.
If there are any differences between them, please tell me.
The modifying clause usually follows the phrase it modifies. However, in case the phrase is very long, it goes to the beginning of a sentence.
'Reading a newspaper' is a gerund phrase modifies the verb 'sat' so it is an adverbial phrase.
"Reading a newspaper, he sat." -- "he sat" is hardly a long clause so there is no need to front the gerund phrase.
"He, reading a newspaper, sat." -- awkward, usually we say "(H)e sat there reading a np."