Pathing Tests can be found in the Navmesh dropdown menu or by clicking on the button on the navmesh toolbar.

Basic Pathing Test

You can Choose Actor and pick an actor that you want to test. In the example above, a LvlDraugrMeleeAllFemale was chosen.
Once an actor is chosen, the actor's attributes are placed into the Test Radius and Test Height boxes.
To test the pathing, Right Click on a triangle and then Right Click on another triangle.
If the actor can path successfully, a green path will be created (shown below):

If the actor is unsuccessful, a yellow path will be created and broken where the path failed (show below):

When doing pathing tests, there are a few things to remember:

ALWAYS choose an actor! Remember that if you have large creatures in your mod, you will need to use them for pathing tests (in areas you want the big boys to be).
If you can't path between two points, see if a shorter path will work in the same spot. The fat yellow line may show a break in the wrong tri - you may have to fix a tri further down to make that break go away.
Pathing is difficult in narrow areas - if the space is not wide enough, you'll have to move objects. Remember any havok items and furniture are ignored by pathing tests, so don't worry about those.
Sometimes everything looks good, but no matter how you pattern your edges, you just can't get through a certain spot. The simplest thing to do is to delete the offending tris and then use edge-select (G) to double-click both edges on either side of the gap, and let the CK fill that spot in. It will usually work (Even if the CK builds the exact same tris you had!)
Most importantly - IF IT AIN'T BROKE, DON'T FIX IT! The auto-gen can make ugly navmeshes, but try pathing on them before redoing them.