Shayna asked me a great question after class. She had noticed that in the example showing one set of quotation marks within another, there was a space between the single quotation mark and the double. She wanted to know how an editor would indicate that space.
I told her that the typesetter would take care of formatting the space, but let me say a little more here.
Editing text so that a typesetter will know how to format it to produce lists, extracts, and so forth is a skill in itself. It is much like using HTML code to format a page. The editor has to visualize what she wants the text to look like, then deploy her marks so that the typesetter will know how to place the text on the page. This placement is, of course, relational: the text is placed relative to the top, bottom, and side margins, the gutter, the text around it (including headings), et cetera. Einsohn has some nice examples of this in the chapter on quotations.
For the space between a single quotation mark and a double one, the editor can use the hair- or thin-space marks if the typesetter will not format such things. Generally speaking, the editor has to be aware of the design principles governing the publication (book, magazine, etc.) she is working on so that her choices don't violate those principles.
When we have our session on using computers in editing, I will give you demonstrations of what I mean.