Undo (keyboard shortcut ⌘Z) does exactly as you would expect: it undoes the last thing you did. The number of undo's is only limited by your system memory.

Once you have saved a drawing, you can't undo previous steps.

Redo (keyboard shortcut ⇧⌘Z) simply reverses the last Undo. The number of redo's is only limited by your system memory.

Once you have saved a drawing, you can't redo previous steps.