Here are your choices of edits. Notice, the Editing choice is "grayed" out because the example I chose came from a document that I only had "Commenting" permission.
When you type in your suggestion, it will show up and a "post-it" will show up on the right to show what the suggestion was and where it should go. The owner then needs to approve or disapprove of the change. The owner gets an email to notify them of the suggestion.
This is a pretty nice feature. It makes the suggestions a little nicer than just highlighting and making the suggestion in the "Comment" box. Next time you are collaborating with someone, give the "Suggesting" option a try.