Keeping editors happy

How should you respond to referee reports when you re-submit a paper?

I have never been the Editor of a journal but I think they really appreciate it if you do the following in your cover letter:

Abstain from derogatory comments about the referee(s).

Explicitly re-state each objection of the referee before responding to it.

(Paraphrases may be suspect, either missing the point for mis-representing it.)

Then respond to the objection.

Finally, clearly state how and where you have modified the manuscript in response to this criticism.