How do I apply discounts to invoices? What options do I have for applying discounts?

You can apply discount at item level and discount at voucher level
 To apply discount at item level follow these steps:
 Step 1: Go to administration menu
 Step 2: Then click on configuration option
 Step 3: Then click on features and option button
 Step 4: Then click on inventory tab
 Step 5: Then select item-wise discount type as simple or compound as per requirement
 Step 6: Then go to to administration menu 
 Step 7: Then go to configuration option
 Step 8: Then click on voucher series configuration
 Step 9: Then select the invoice for which you want to enable item wise discount
 Step 10: Then press enter and then select the series 
 Step 11: Then click on voucher configuration option
 Step 12: Then specify the discount structure and save the window 
 Step 13: Then go to transaction tab and create a invoice
 Step 14: While creating invoice and after entering on item a window will appear to apply the discount
 To apply discount at voucher level:
 Step 1: Go to administration menu
 Step 2: Then click on masters option
 Step 3: Then click on bill sundry
 Step 4: Then click on add option then create a bill sundry specify name as discount 
 Step 5: Then select bill sundry type as subtractive and bill sundry nature as discount
 Step 6: Then specify the amount of bill sundry as percentage,per main quantity and absolute amount etc accoording to your requirements
 Step 7: Then go transactions tab then create a invoice and you can select bill sundry as discount and you can apply the discount accordingly