As a writer I love to see other people's processes, and I thought I'd share what works for me -- maybe it will work for you, too.
1. I use a hard copy. Every time I finish a draft, I shoot a draft over to Officemax to print and bind it. I mention this because I told my critique partner to try it recently and she called me excited because the book was out of her head. It really helps to see it on paper. Just grab a nice red pen to use.
2. The first draft/edit/rewrite, I do chronologically. Then I read it straight through again, make more notes on the new hard copy. Then do a second rewrite/edit of random chapters. This helps me to keep from feeling like the revision is monotonous. Additional scenes and conceptual issues are dealt with one at a time, added in and changed gradually. Then the final edit I do chronologically to ensure everything flows.
3. I use a cookbook stand to hold my hard copy while I put my notes into the file on my computer.
4. I take my netbook everywhere while I'm working on a manuscript. It weighs like 3 lbs and fits in my purse. You never know when you'll get work time, and if you do find yourself sitting around with time to kill, you'll wish you had it!
5. I outline rewrites/revisions in terms of overall plot, subplots, character arches, and important themes, using a giant bulletin board and notecards in my master bedroom. I'm adding a huge dry erase board for book two!
6. And my favorite writing/revision trick: Sign up for a gym with childcare and work on your kindle or hardcopy while you work out. Two child-free hours go pretty far.