There are 2 articles on the old documentation site which explain the feature in detail. But they haven't been updated with the most important thing: how to get there! So here it goes, just type:
The quickest & easiest way in V4 is to right click a node in the content tree and select Edit In Canvas.
Click on a textarea that has been canvas enabled and you'll be able to edit it instantly.
This feature works in most modern browsers including Safari, Firefox, Internet Explorer and Opera but not in Google´s Chrome.
For your reference:
Introduction to Live Editing
Programmer's guide to Live Editing