After thrashing out the issue, and several changes to my own opinion, I'm able to answer Litlove's question - What do you think of this notion of collaborative writing?
At first glimpse the idea of collaborative writing and digital publishing are alien, unwanted advances on one of histories most important technologies - the book. The thought of a writer opening up their writing/editing process to others is absurd, pointless and possibly very vain. How can literature gain from a writer and the audience writing the novel/poem/play? It removes the enjoyment of simply reading a piece of work, and the writing may lose a lot from having so many voices.
Digital publishing is inevitable; I'm saying that with the possibility of it being another fifty years or more before it really is inevitable. The new digital paper is already available in new e-reader devices; newspapers are investigating digital publication and traditional publishers are already scrambling a resistance. E-book sales are rising, mostly in academic books, and as more and more people carry at least one mobile device (phone, pda, laptop or mp3) the cry for digital text is growing. Perhaps not in our lifetime, but inevitably, digital publishing will overthrow the physical book - for the foreseeable future however, the two will exist separately with the internet bridging the gap.
With that in mind, collaborative writing can really only exist online at present, but could act as the most crucial bridge between the two media. The change in how people interact with the web - blogging, social networks etc. - is providing a much greater confidence in reader interaction and developing the web as a serious media. Newspapers are using wikipedia (carefully) as a source of reference and many writers are surviving on income from their blogs alone. As this confidence and development increases writers are forced, by vocation if for no other reason, to move with their audiences.
In following their audiences online, into the blogosphere, social networks etc., writers are faced with a more informed and much more demanding readership. Great literature/journalism is no longer accepted as a result of who published it - ordinary day-to-day readers want justification, explanations and insight. Much like musicians have been forced to digitize in order to maintain their audience, so now, are writers. Collaboration between writer and reader is part of this, allowing the audience a greater sense of input and realism.
Currently writers with blogs/websites are trying to build their own audiences before approaching publishers, presenting them with a large enough audience to warrant publication. This is the first step in the right direction - but it shouldn't end here. Writers should, foreboding as it sounds, ask their audiences' opinion before publishing - allow the reader an input to the editing/drafting process. Introduce those changes, or discuss them, build them up and interact with readers from inside the writing process rather than presenting a final draft.
There are problems with this amount of audience interaction, and it may not be to the taste of everyone - there will always be an audience for books that are not written collaboratively for instance - but the questions of justification and explanation will remain. The consummation of the time involved in discussing and moderating a website/blog can be extensive, but it is fast becoming a necessary task in order to maintain an interested audience.
The inevitability of digital publishing increases the probability of successful collaborative writing - the increased discussion between writers and readers is moving toward it already. Projects and links listed in previous posts show the increasing interest by readers to become involved in some way with a book or an author. This will not replace the book, not at present, but it will be an undeniable rival and will change current publishing methods. Books are evolving and the book industry should be encouraging change, striving for larger audiences and developing new writing.
Historically, literature has always been at the forefront of change - why should it be any different now?