I have spent years “collaborating” the old-fashioned way. I write a draft of a document, and I send it off to a peer or editor for review. They take their turn commenting and editing and send it back to me. I then take my turn revising the document based on the comments made, and so it goes. Collaborating like that is inefficient–like trying to have a conversation on a walkie-talkie where only one party can speak at a time.
Collaborating like that can also turn into complete chaos when there are too many parties involved. I worked on a paper once where I received edits from one manager, then while I was revising it I received different edits from another manager that conflicted with the edits I was already making. Trying to work out which changes supersede which when there are multiple copies of the same document floating around can be a nightmare.
Enter, Google Docs. With Google Docs, rather than sending my document via email as a file attachment, I can just share it with my editor. My editor and I can both view the same document online at the same time.
At the top right of the display there is a small bar that lets you know which other users are currently signed in and viewing the document. An arrow at the right of that bar opens up a chat window where all parties currently viewing the document can chat and share thoughts about the document.
Not only can multiple users view and chat about the document, but all of them can also be actively editing the document at the same time. Each user is represented by a different color cursor so others can see where they are working at the moment (hovering your mouse over one of the cursors will also show you the name of the user), and changes are reflected instantly to everyone so there is no confusion and no issue with conflicting changes overriding each other.
I know I sound like a broken record–but, to be fair you can also collaborate in real-time using Microsoft Office Web Apps. But, Google has been providing real-time collaboration longer, and has more or less established real-time collaboration as a defining characteristic of Google Docs that sets it apart from Microsoft Office–at least the traditional, locally-installed version.