So I started building this as a coding exercise for an interview, I'd particularly be interested in getting feedback on my approach to Operational Transformation: http://gpickard.wordpress.com/2012/02/17/my-approach-to-oper...
It was pretty tough to implement (for me at least). Especially when I got to using the "Bridger" and "Buffer" to transform.
Your approach seems much simpler. Do you retain the ability to "play back" the edits like etherpad did?
How big can a document get before you run into the precision issue you mentioned?
Collabedit looks nice and solid! (Hadn't been aware of it.) Did you roll your own editor or did you use something like ACE or CodeMirror?