Yes, it’s another beta and invite-only product which was added to Google’s ever growing suite of web applications when they acquired the company behind it sometime back. From Wikipedia:
Writely is a web-based word processor currently in beta, and soon to be integrated into Google’s suite of web applications (following a 2006 acquisition). It can be used as a collaborative text editing suite, and features access controls. Writely’s user interface is a WYSIWYG word processor that appears within a web browser. Menus, keyboard shortcuts, and dialogue boxes show up in a way similar to what you would expect on a GUI-driven word processor, such as Microsoft Word or OpenOffice.org.
You can read a review on it here by HMMaster. And if you like it and want to try it out, post a comment here and I will send you one. ;) Once you’ve got an account, you can invite others by following the steps here.