Joanna asked what I thought of Google Docs. I have to admit that I really find it hard to make myself use it. I have always disliked the big Microsoft conglomeration of tools that can be accessed through one simple log-in. I feel the same way about Google. I am not convinced that I wan't them controlling my online life any more than I wanted Microsoft to do it.
I am planning to really look seriously at ZohoWriter and ThinkFree and any other smaller word processors I can find before I try to sue one with my students. It seems like there are new tools out there on an almost daily basis.
The only problem is that all these little companies are hoping to go the route of Writely and be gobbled up by some big company someday. I don't think you can pick one of these and expect to use them forever. I guess you might have to be happy if you can make it through to the end of the semester before you have to look for a replacement.