Critiquing

Since I recently covered rewriting, I guess I should cover the other side of things: critiquing other people's drafts.
This can be tricky water to navigate. If a friend asks you to read their term paper, critiquing is usually easy - fix the spelling mistakes, maybe suggest switching one paragraph with another or deleting some confusing sentences. But when your friend asks you to read their creative writing, whether it's a short story or a novel, you'll have to be a bit more careful when you read the story and when you suggest changes.
First, you want to read it for more than grammatical errors. Make a note if you see misspelled words or awkward sentence structures, but don't focus entirely on line edits. If it's a first draft, you should be looking at the story as a whole, the big picture. Does the plot line make sense? Is it paced in a way that keeps you reading right to the end, or did some sections wander off into the woods away from the plot? Do the characters' motivations make sense, or do they have wild personality swings? These are things you should take note of.
But while you're reading, keep in mind that this writer has their own style, too. Don't try to force your own style on them. It's fine to note if they use way too many adverbs and strange dialogue tags, for example, but if you don't use much dialogue in your stories and your friend does, it's not usually very helpful to say "Cut all this talking." Unless, of course, the characters go off on 10-page long discussions of Shakespearian acting while they're being attacked by werewolves. Then you might suggest a cut. There can be a fine line between helpful edits and edits that just reflect your personal preferences. Make sure to include a disclaimer with your editing suggestions - your critique is just your opinion; the writer doesn't have to agree or take all of your advice.
Which leads me to the last thing you should remember when you edit another person's work: writers have feelings too. By all means, cover their manuscript in red marks - in fact, the more red the better, usually. But there is a difference between constructive criticism ("I think your story might flow better if you cut the 40 pages of the hobbits sitting around Bag End" - oh, er...) and deconstructive criticism ("Wow, did you really write this? It's so boring"). Also, don't forget to sprinkle a little praise in there to bolster their dying hopes when they receive their newly edited baby. If they are good at hooking their readers at the start of chapters, mention it. If they have a few lines of great prose, jot a compliment in the margins.
And if your friend gets upset by any of your suggestions, just remind them again that they are only suggestions. If you didn't like their story, you would not have spent so much time trying to help them better it.

Writers: Love your readers. Editing takes a lot of effort. Buy them chocolates.