Commenting in Google Docs is a great feature to use when grading student work. The COMMENT button lets you key on the students document to leave comments and suggestions.
There are a couple of ways to activate the comments button. A comment button is located in the top-right corner of the document. The comment button can also be activated by clicking the INSERT menu on the toolbar.
Google Docs has had a recent update to commenting that is much easier. An Insert Comment button now appears in the Google Doc when you highlight any text in the body of the document.