As I think I've mentioned before, the fan fiction I've been working on for the last month has two other co-authors. When we first started writing, we realized that the most efficiant way to keep track of what we were all writing (since we usually wrote at the same time) was to create a blog.
The benefits of a blog- (vs. e-mailing or fanfiction.net)
1) It is online and therefore accessible from any computer, yet the privacy level can be controlled so that only the authors can read it.
2) All of the authors can be created moderators and have control over what happens on the site, but each still retaining their own accounts.
3) The story exists in one complete form, not several e-mails. Furthermore, an author can go back and edit their chapters without having to re-send it to the other participants.
4) The draft-in-progress for any given chapter can be read by the other authors. Therefore if one of the authors is writing, the other authors can stop in and get the latest version of what they've written, giving feedback, critique and correction as the chapter is being written.
5) When the story is finished the privacy levels can easily be adjusted to allow in certain readers.
6) The links function on the side of the blog makes it easy to list a table of contents, and catagorize other posts such as pictures or plot sketches.
All this goes to say that I'm a huge fan of using a blog for group writing. It's been a great tool for our project and I would definetely use it again.