How to respond to critical referee's reports

The following is taken verbatim from What should I do when a referee criticizes my manuscript? (part of the Web Submission Guidelines of the journal Physical Reviews)

Read the referee report carefully and dispassionately. Approach the report with an open mind. What may at first seem like a devastating blow is perhaps a request for more information or for a more detailed explanation. At other times the referee may indeed have found a fatal flaw in the research or logic. Put yourself in the position of a reader, which is exactly the position of the referee. Is the paper well written? Is the presentation clear, unambiguous, and logical? Respond to all referee comments, suggestions, and criticisms. Explain which changes have been made and state your position on points of disagreement. In our experience, appropriate response to some referee comments may require more research or even reconsideration of the research project.