I used to have a three revision process for all my stories, which I know I posted about before, but I think the post got lost in the move back. Since I've joined a writer's group, that's expanded to include an extra revision. Let me describe briefly how I do it.
Rough draft - This isn't really a revision, but it is where the process starts. The rough draft is what I write when I have a story to tell, and thus I tend to rush from beginning to end to get there. Thus I will sometimes skimp on the details, avoid getting bogged down in things I ought to research, and even just leave out scenes I'm not eager to write. I tend to leave notes to myself in these so I can come back and fix these issues later.
First revision - In the first revision, I fill in the gaps of the rough draft, correct the obvious mistakes, whether in plot, character, or style (or grammar!). After this revision, I show it to my writing group.
Writer's Group - This isn't a revision for me, per se. Rather, it's a meeting where some fellow writers come together and critique my work. Generally, when they do their job well, I can find out what works and what doesn't, and they'll give me back my story with lots of comments in the margins.
Second revision - This is the revision where I go through the comments made by my writer's group and incorporate them in the story, as best I can. Sometimes I'll disagree with the device, and sometimes different people will give flat out contradictory advice, and sometimes I'll see what they want but just can't figure out a way to do it. Regardless, after this revision, I should have a much better version of the story.
Third revision - This is the hardest revision. This is where I print the story out and read the story aloud, all the way through, making corrections as I find issues. Generally, this means there's a lot of red ink on the page by the end of the day. Then, of course, I take the hard copy to a computer and rework the story so it conforms to my notes.
Fourth revision - This is the final revision, where I go over the story one last time, polishing it up, and correcting issues the previous revisions either failed to correct or created.
It may sound like a lengthy process, but even at this point, it's not really done. Oh, I'll format it and submit it to some places, but as the rejections come back, I'll make revisions based on what they say. Or, when I'm lucky, as editors request revisions. Or as new ideas present themselves. Ultimately, the story is only really done once it's published.