A recent article on AstroBetter reviews some of the available tools for collaborative writing with an eye to writing proposals. I wanted to give my perspective on these tools since I have used all of the tools they discuss in the article: ScribTeX (as well as the similar ShareLaTeX), Google Docs, Dropbox, and version control systems, e.g., Subversion or git.
I agree with most of their strengths/weaknesses lists for the tools, although I’m not sure why they say version control systems like Subversion or git are “intolerant of simultaneous edits”. Merging is quite good in these system unless two people edit the exact same line of a file. Usually collaborators have different areas of responsibility in the document and conflicts would only occur occasionally if people are doing global actions like proof-reading the entire document at the same time. Even then, the conflicts are detected by the system and can be manually corrected by the later committer.
I favor a Subversion/git repo for doing any serious work (although I do highly recommend Dropbox for sharing/syncing files, just not for collaborative writing). I use Subversion repos for all my proposals, although I am beginning experiments with git for certain internal proposals, papers, and other writing. I used a Subversion repo for Modern IDL. It’s flexible enough to handle your writing output (not the best for a single monolithic Word file, but great for any text based system like LaTeX), while also handling other related assets like code, images, diagrams, slides, etc. well. Data is stored locally, but also backed up on a server.
I have reservations about providing proprietary/sensitive/private data to a third-party service. Also, relying on a cloud service (especially like relative newcomers like ScribTeX and ShareLaTeX) might be disastrous if there was an outage just before a proposal deadline.