Nordic River's aims to simplify matters by allowing users to compare multiple versions of a document to see what's changed and who changed it, much like Microsoft Word's Track Changes features. Drag in multiple Microsoft Word documents (or rich-text files) into its window and it'll display which sections differ: inline where it involves smaller changes, such as deleted words, and in column format for more involved changes, such as a paragraph altered by multiple authors. You can also move chunks of text around by dragging and dropping them.
In addition to its collaboration and change-tracking features, TextFlow also features a handful of basic formatting abilities. When you're done editing a document, you can export it back into Word format. Unfortunately, there are some limitations, such as no support for images or tables.
TextFlow runs via the Adobe AIR environment and is currently in beta. The beta version doesn't store your data on TextFlow's servers, but the final version will allow it to store a complete archive and history. There's a free test drive on the Web site and the AIR version is now available to the public for download.