I've started to use Google Docs a lot. Trying Versionate, for text there is little advantage of either. GDocs seem a bit more peppy.

I was reading a Paul Graham interview from a while ago: http://www.techcrunch.com/2006/09/02/an-interview-with-vc-pa...

Here is an interesting quote: " I wouldn't advise competing with Google in things they're good at. So what is Google good at? As a first approximation, making things their own developers use at work. So they'll do a better job on an online calendar than a video sharing site, for example, because their employees are probably not supposed to be sitting watching videos at work. "

He goes on to mention Google's size, which is probably another factor here.

It would be interesting to hear more about what folks at Y-Combinator think about this direct assault on a growing Google service.