A friend of mine introduced me to a new project he’s working on. As the website touts, Etherpad is really real-time collaboration. It lets multiple people work on the same document simultaneously.
I used it to great effect working on a recent document collaboration. I collaborated with 2 other people, making a proposal for the San Francisco Unified School District. Sometimes we worked in person on multiple laptop computers in a coffee shop. Sometimes we worked completely online, using the tools chat functionality. It worked well both ways.
And it is really a hoot watching someone type on their computer and have the each character appear on my screen in realtime, just 1 second delayed.
The product is very new but it accomplishes its core functionality flawlessly. Try Etherpad.