I use bzr (any particular reason why git, by the way?) and I've ended up using it for just about everything: papers, seminars, teaching, configuration files, my entire website, just about everything I do on a computer is in a bzr repository. Although I've yet to convince any collaborator to use it as well, I still find that it makes life easier since I can easily keep a record of when I sent something to someone else and merge in changes against that particular revision. I can also publish a repository and make it easy for a collaborator to have access to the files without needing to use bzr themselves.
Within a paper, I use the changes.sty package for sharing comments back and forth between myself and a collaborator.
Bzr has "nice" frontends so it might be possible to persuade a non-technologically minded person to use it (I'm a commandline junkie so have no experience of the available GUIs).
I also use a wiki (nlab, naturally) but that is (at the moment) for less focussed projects than a specific paper. However, when writing anything substantial there then I do it "offline" (even so far as to "compiling" and viewing it) and only sending it into the ether when I'm happy with it.
I find it completely incomprehensible that people want everything to be "in the cloud". I have access to several high-powered computers which are capable of running whatever software I'm using incredibly fast. Why would I swap that for a slow, crackly internet link which is guaranteed to be down the one time that I really need it? By using a DVCS (distributed version control system), I only need to be connected to the internet at the start of a given session and I can get my files off any one of a number of machines so it doesn't matter if one or other is down. In the worst case scenario that I can't connect, I can work offline on something and then merge my changes back again later. Indeed, my entire DVCS currently takes up a mere 71Mb (of which 25Mb consists of my local copies of Instiki and xournal) so I could easily carry it around with me on a memory stick (encrypted, of course).
If I really did want to do some "real time" collaboration, I would use either gobby (for working on files or papers) or jarnal (for working on maths). Gobby has real-time editing (and has had for quite some time) whilst with jarnal I can use my graphics tablet to actually write the mathematics for the other person to see just as if we were at a blackboard together. After all, if I'm doing real-time collaboration then I don't want to bother with getting the LaTeX syntax exactly right. I'm not bad at TeX, but if I'm in "Math Mode" then I don't want to be bothering with it.