Once I get a better idea of what needs to be fixed plot-wise in my rough draft, I start rewriting. Usually I have a stack of scribbled-over, post-it splattered pages, a new outline, and a bunch of pages in the trash. This is because A) I like to work from an actual paper copy when I make revisions, B) the original story/outline has undergone major reconstructive surgery, and C) a lot of the rough draft turned out to be useless. (At least for the moment.)
When I start rewriting I start from scratch. Using my outline to keep me on track and my scribbled-over pages to give me something to work with I open up a brand spanking new document, label it "Big Shiny Idea - Draft Two ver 1". Then I begin with sentence one (even if for some miracle I decided to keep it the way it was in the rough draft) and start typing. All of it. From scratch.
I can type 2k in an hour if I absolutely have to. If you are a slow typist you might want to consider improving your typing speed or use an alternate method for revisions.
Before you say "Screw that. I'm not retyping the whole damn book." let me explain my madness.
I noticed a while back that when I went through and made revisions (especially in longer - novel length - work) that I could tell which sections had been in the rough draft and which were revised. Sometimes it was just a shift in voice or tone. But most of the time the revised sections simply did flow with the rest.
Maybe I'm the only one with this issue. Maybe every other writer on the face of the planet has no trouble in making revisions flow seamlessly into the rest of the story. But I, apparently, struggle with this.
After a bit of flailing trying to rectify the problem I discovered a simple solution. Write it all as one piece. When I started at the beginning and wrote through to the end (not all in one sitting if we're talking about a novel) my brain ironed out the seams and tweaked the notes I had made so that everything actually fit together.
I'm not sure why it works like that for me, but it does. And I always recommend that you try and actually retype as much as possible when you revise a draft. This also helps smooth out changes in voice or writing skill that may have developed over the course of writing the novel.
Whether I'm rewriting everything or filling in chunks I do find it works best to start at the beginning and work through to the end. It just helps me keep the story moving forward, the character arcs arcing and the tension moving gradually toward the climax.
What about you? Do you revise beginning to end or hop around until it's all finished?