The great advantage is that
everybody writes in the same place, missing parts or conflicting
elements are easily spotted and there is no need to send new version
that have to be painfully merged!
To access the resources each user has to register and get an account. in order to be identified and allow the system to prevent (or authorize you access to a given resource. The system requires you to use a working e-mail address as id-name and asks you to choose a password to use for accessing your own space. There is no need to have or use a gmail address ad ID-name. Actually, for office documents, I prefer using my office email ad ID-name. You can register at this address: https://accounts.google.com/NewAccount?service=wise
There are different ways to set up a shared access to a given document, say the proposal form. For co-editing I suggest direct invitation. For this, coauthors have to agree on which ID-name should be used for sharing, obviously these have to be registered ID-names.
Extensive help is available here: http://www.google.com/google-d-s/documents/index.html
One wakeness I couldn't yet overcome, although the help system says it is possible, is how to understand who wrote what, when. See "Revision history" http://support.google.com/docs/bin/answer.py?hl=en&answer=190843