Plutext is a new service, currently being developed, will bring nearly live editing to Word documents, that was demo at the Office 2.0 conference. The service works as a plug-in to Word, adding a collection of buttons in the "Review" tab. These new functions let you invite users into a document, push your changes to the Web, and read in new changes.
While Plutext does not support strictly simultaneous editing (you have to intentionally publish your changes and get new updates), neither does it let two users get out of sync by letting them work on different versions of the same file. You really can have a dozen people in the same document at the same time. Plutext uses Word's existing Accept and Reject Revisions function to review changes other people have made on your open document.
There's also a wiki-like revision history that acts as an audit trail of all the work done on a document. Revisions in this report are flagged either by paragraph or section heading (user's choice); the latter could make reading updates on technical and legal documents much easier than it would be otherwise.
More info: Plutext