OK, I wish I had known about this 4 or 5 years ago! My daughters would come home with group projects and so often, it would fall to one person in the group to get everyone's "part" and compile the project to be handed in. What a time and frustration saver this would have been.
From a teachers standpoint, I see many uses for Google Docs.We have a data team for each grade level at our school. As a team, we choose a standard that has weaknesses across the grade level and come up with a pre-test to assess the students. Using Google docs would allow us to collaborate on the creation of a test without having to be together. We could also use the spreadsheet to collect the results. I really like that then I could access this information from home (which is where I am most of the time when I am writing my lesson plans). This would also be a great way to share information with parents and students. If you give homework or even class work that has been teacher created, and a student is sick, you can have it posted so they can access it from home. I created a slide show from our recent field trip and thought you could allow other teachers to add photos and comments. If you had parents on the trip and they also had pictures, you could allow them to add pictures as well.
I hope to have more time to play around in Google docs and see what other applications it could have in the classroom or within the school. Here is a link to a small sheet I made for Math. Volume Question.