Oh, don't get me started on modifications we needed to do to make undo look reasonable ... :) At first, we thought that undo is the same thing as collaboration but... nope.

The crucial difference is that with undo you have a context (old document state). With collaboration, you don't. So if both users put a character at the same position, in collaboration the order of output doesn't matter (and can't be solved really). In undo it does, because a user remembers what was the order of the letters before they made a change.