While the article discusses using --word-diff to view changes by-word rather than by-line, which fixes the problem of paragraph reflows cluttering up the diff display, the bigger problem I've had is that it's not entirely obvious how to patch in that manner. As a result, if two patches touch the same paragraph, they usually conflict. You could avoid that by using the classic researcher approach to collaboration: taking locks on sections. But if you're going to do that, SVN is actually better, because you can break out the sections into separate files, and use SVN locking to do the edit-token bookkeeping, rather than having to pass around a "Mark is currently editing Section 2, pls don't touch" lock through email or in LaTeX comments.

Here's a StackExchange thread discussing possible solutions for finer-grained patching: http://stackoverflow.com/questions/5587626/git-merging-withi...