Paper Collaboration Software

Recently, I completed a paper with Isaac Chuang and Aram Harrow. In the final stages of completing the paper we used a CVS (Concurrent Version System). For those not familiar with CVS, this is a piece of software which allows for version control (meaning it records the history of the source files) and nicely protects multiple authors working on the same source (basically this means multiple authors can work on the paper without fear of overwriting other’s changes.)
Using a CVS was definitely an improvement over the normal way paper collaboration works: the authors bounce emails back and forth with the source (aka LaTeX) attached. This essentially means that only one person at a time has “the token” and is responsible for working on the paper. While knowing that “you have the token” can press you into working efficiently to getting your changes done, not having anyone else working on the paper at the same time can be frustrating. Especially as a paper nears completion, and small changes are constantly being made by all authors, multitasking with CVS is definitely a plus.
But there are some issues with using a CVS which are more specific to scientific paper writing which make me think a paper collaboration CVS might be a really nice tool. Any ideas? Here is one idea:
Traditionally authors comment out sections which they change. Thus, for instance, if I am writing a new version of a paragraph, I will comment out the old version and keep it in the source. One reason for doing this is that it allows one to revert back fairly easily. With a CVS, of course, this is not strictly needed: the CVS is designed exactly to revert to prior version if necessary. But there is another reason why we comment out: we often cut and paste from the commented out component, or just want to quickly reread the commented out component as we write the new version. So the CVS needs some way of dealing with this technique: author’s want to have extremely easy access to previous versions. In fact what we really need is integration with an editor so I can turn on and off display of the “deleted” sections from prior version.