Etherpad
Now, Etherpad was the defacto realtime collaboration tool. Don't go looking for etherpad however. It was bought and killed by Google. Google hopes to have the same functions working in Google Wave. But if you do search for etherpad you will find numerous clones of it all about. ietherpad.com seems to have picked up for the original etherpad.
Whatever version you use it is pretty much the same. Someone starts a "pad" and then sends the link to people for them to join. Posting the link on a website or your Moodle works well. Users then can create and edit text in real time. Revisions can be tracked and other files can be imported. The document can be exported to pdf, html or rtf formats. A timeslider allows a sort of movie of how the document grew and changed over time.
Uses in the classroom could be a class generated story, study guide, notes, video discussion, backchannels.
Here is a "pad" you can try and see how it works for yourself.