FoSO:(sorry, no sidebar-specific comments feature yet)
Obviously you have to tread carefully. I think the cliche advice is to give 'em a mix of praise for what they are doing well and critique for what they need work on. It's not easy.
I work for my dad, and he just kinda acts like he doesn't understand what you're saying or why you're doing it a certain way, then he's open for rebuttal and argument. Doesn't like it makes sense, but it somehow it gets hashed out in the end. But. . .that might just be because we're family. . .after all, the guy who argued second most after me got canned because he couldn't conform.