The menu entry editor looks much like the main menu interface, but the lines in the menu are individual commands in the selected entry instead of entry names.
If an <ESC> is pressed in the editor, it aborts all the changes made to the configuration entry and returns to the main menu interface.
When a particular line is selected, the editor places the user in a special version of the GRUB command-line to edit that line. When the user hits <RET>, GRUB replaces the line in question in the boot entry with the changes (unless it was aborted via <ESC>, in which case the changes are thrown away).
If you want to add a new line to the menu entry, press <o> if adding a line after the current line or press <O> if before the current line.
To delete a line, hit the key <d>. Although GRUB unfortunately does not support undo, you can do almost the same thing by just returning to the main menu.