As an editor, establishing a good editing relationship with the author is of primary concern. Without trust between you, editing is going to be a disaster. The author needs to know you're interested only in making their work shine, not changing their voice, style or story. When an author knows this, they will be much more likely to accept suggestions and changes. So work hard at making your author(s) understand this and give them plenty of reason to trust you with their "babies."
1. Grammar, spelling and punctuation are paramount. If you're not sure, check it out. So if you have problems with lay and lie, its and it's, affect and effect, make sure you look it up. There are plenty of online dictionaries and places to check punctuation and spelling. Bookmark your favorites and keep them handy while you're editing. And when you change something, remember to educate your author as to why you're making the change. If you make an author aware of the difference between you're and your, they will be less likely to make the mistake again, and you (or another fellow editor) will have less to correct in their work in the future.
2. Watch for awkward phrases and unclear ideas. If it doesn't make sense to you, it's not going to make sense to the reader. Have the author clarify or rephrase.
3. "God" does not have to be capitalized if it does not refer to the actual deity. So "Oh my god that feels good!" would be acceptable. However, it would be, "I prayed to God that he would get better."
4. Purge the words "just" and "that" as much as possible. They are often unneeded. For example, in the previous sentence, the word "that" is unnecessary. It should read, "I prayed to God he would get better." However, the "that" in the former sentence, "Oh my god that feels good!" is necessary. Smoothness/readability is the most important guide here.
5. Here's a short list of words you should probably purge as much as possible from most works: a bit, about, a little, actually, almost, already, appears, approximately, basically, close to, even, exactly, fairly, finally, just, kind of, mostly, nearly, now, pretty, quite, rather, really, seemed, seems, simply, slightly, somehow, somewhat, sort of, suddenly, truly, utterly, very
6. Minimize the use of "And" and "But" to start sentences, unless it has a dramatic use in the scene.
7. A scene break should not occur if the action is still contained within the same time frame and location -- unless it's being used to indicate a point-of-view switch.