Some word processing packages have facilities to track revisions to your documents. In her book The Writer’s Survival Guide, Rachel Simon offers a slightly less sophisticated technique for making non-destructive revisions to your manuscript. She writes:
[…] I remembered that I had once read about a writer who threw into a dresser drawer everything he scissored out of his early drafts. I decided to follow this example and see if it helped, though I decided to use not a drawer, but a computer file. I called it CUTS, and whenever I hit a section of writing that I thought I might need to sever from the novel, I simply tossed it in there. Almost instantly, I lost any residual squeamishness about revising my novel, because I knew that if I wanted to reuse those sections, they still existed. This, in turn, reinforced my new ability to see my text as fluid. I could cut, I could retrieve, I could add, I could cut what I added. The novel melted from solid concrete back to a liquid form, one that I could pour and repour into new shapes and sizes. I felt freer than I’d ever felt before. After twenty-five years of writing, I finally felt that I was learning to write.
Although I read a hard cover copy of Simon’s book, I just discovered that you can read the entire book for free at her website.