How can I let users create new drafts for *existing* content? We have two roles of user: Admins and Content Creators (basically Authenticated with a few more permissions to create content). We'd like to have Content Creators be able to create new drafts from existing content and let the Admins approve to publish. 

While this approach sounds straight forward, I've hit a number of road blocks and have tried multiple approaches: 


Workbench Moderation: I've failed to install this to any working degree. Each time an admin approves a piece of content it's permanently unpublished. I describe the issue better here. If an Admin tries to publish their own content it falls into an endless cycle where WB sees the item as published but Drupal reports otherwise. Others seem to have similar problems. 
Draft: Looked promising but there is no D7 release
Save Draft: Works nicely on new content, but doesn't offer to create a new draft of an existing item.


Other things we consider:


Workflow: I'm hopeful but there is a lot of configuration to set up for such a seemingly simple work flow. Also it appears a bit overwhelming. I hoped Workbench to be a simplified version of this. 


We see that this feature is built into D8. Infact, this very ticket explains what we're trying to do:


  Ideally, I should be able to assign an arbitrary state to any revision. I could have a published revision, a revision pending approval, and a draft revision beyond that.


Is there a way to make this happen in Drupal 7?
We use the Workflow module and have found it to be pretty stable, and we use it exactly as you have described, to allow a content person to edit content, then for an admin to approve it. 

Configuring the workflow module is a bit complicated, but it is worth doing as it will provide you the functionality you need. Generally it has the following steps:


Install the workflow module.
Configure the workflows:


Create a new workflow.
Make some states.
Assign the workflow to a content type (the tutorial below calls it a node).

Set the permissions for each type of user to use each state of the workflow.


Creating a Workflow for Drupal Users contains a good tutorial.