Collaborative editing and revising is at the heart of Draft -- An alternative to Google Docs, perhaps with even easier to compare, accept, reject, re-revise suggested edits. If you struggle getting all your students set up with Google accounts or need them to write and re-write without formatting tools obscuring the way, Draft is worth checking out. Find it at http://draftin.com.
A couple of inline feedback tools for written work in this episode: Crocodoc and Kaizena. With these tools, you can comment on and mark up student work (or your own work), on the web and on the original document.
Sites Mentioned in the Episode: