Google Docs and Etherpads: "Realtime Collaborative Text Editing"

For about a year now, I've been using Google Docs for collaborative text editing. The tool allows me to share documents with other people, either for viewing only or for editing collaboratively. Up to ten people can view or edit a document simultaneously. A revision history, color-coded by author, is created automatically so changes can be tracked and restored to earlier versions if necessary. There's an integrated chat, which shows up as an IM window, so that collaborators can discuss what they're doing while they're doing it. The tool also makes it easy to email and post documents online. (For a more detailed description of Google Docs, see the Google Docs Getting Started Guide.)

This past week, I played around with iEtherPad. Although Google shut down the EtherPad.com servers, after acquiring AppleJet Inc. and the EtherPad collaboration product and technology, it released the code as open source. So, etherpad services are still available through the following links:

iEtherpad
PiratePad
Sinc.in
The Etherpad Foundation
TypeWith.me

When I tried out iEtherpad with my Portfolio in Professional Writing class, I discovered that it had the following features:

• My edits appear in the color I select. The edits inserted by my professor and classmates are also color-coded, so it's easy to tell at-a-glance who wrote what. I learned that moving text also makes it show up in your own color, so when I cut and paste a list written by a classmate to a different location, I could no longer tell who the original author was. Also, the palette for author identification includes only eight colors, and it's possible to have more than one person using the same color, a mistake I made when I first tried the tool. 
• Changes happen instantly. Revisions are saved every couple of seconds, and people editing a document simultaneously can see the changes in real time. This seems to be different from Google Docs, which saves revisions less frequently (perhaps every 15 seconds?) and therefore runs a greater risk of concurrent edits conflicting with each other. However, I noticed an April 2010 update to Google Docs may have already fixed this problem and then some. 
• Changes can be undone at any time (similar to Google Docs).
• There's an integrated chat feature (similar to Google Docs).

While I liked using iEtherpad, I don't see it as a big improvement over Google Docs. Just last month, Google Docs was updated "to facilitate rapid and seamless discussions and integrate with email in an intuitive way" (see this March 16, 2011, Google Docs Blog post). As far as I can tell, Google is serious about being the best in this business . . . and eliminating the competition.