I like the idea of being able to share documents between many people. Starting a story, and letting each person add a line to the story is a lot of fun. You could do that in third grade by letting the students take turns using the computers available in the room. I think I would still be a bit afraid to have students add to a story from home. It feels like you don't have enough control. Another way I could use google docs in my classroom would be for expanding sentences. I could enter a very simple sentence, and ask the students to add adjectives and adverbs to make the sentence more complex and exciting.