Why Google Docs? It is an amazing tool, it allows me to work collaboratively with all students on their documents. There is no need to exchange paper, print or even save. No more "I left my paper at home." or "I forgot to print.". Technology problems are almost completely taken out of the equation when using Google Docs.
All changes are timestamped and can be viewed by simply looking in "Revision History". It is a perfect vehicle for students to do collaborative work, as the teacher can see exactly who has done what work and for how long.
To help illustrate this I am embedding a video for you, this often explains Google Docs better than I can.