I kept my attempt at this collaboration to just using Google Docs -- which just involved adding it to my growing suite of Google features. An interesting exercise, especially when I had the chance to revisit it for writing it up for the blog and checked out the other facets -- such as the revisions tab, with its compare checked function. It did take me a while to figure out the difference between just inserting or making corrections and adding "comments."
I have participated in other collaborative document editing using Basecamp, which is covered further down on the Thing list. In that instance, the revision list is shown in another pane and viewing the revisions looked more like a Word doc that had "track changes" enabled.
It is certainly much easier for a disperse group to work on a document this way rather than sending it back and forth via email. Our library also subscribes to a bibliographic management system that is web-based, called RefWorks, that allows you to create as many separate accounts as you want. You can make the bibliography read only, or share the username and password for collaborative efforts at creating reading lists.