You can repeat only certain types of edits. For example, if you just selected text and then replaced it with new text, then repeating the last edit will delete a similar selection contiguous to the cursor and insert the new text. Suppose you file contains the text:
The albatross said it was 8:09, and everyone cheered.
If you select the word everyone and type rainbow, your text becomes:
The albatross said it was 8:09, and rainbow cheered.
If you move the cursor to the beginning of the word albatross (you do not have to highlight the word) and choose Edit > Repeat Last Edit, the text becomes:
The rainbow said it was 8:09, and rainbow cheered.