I just set it up on a spare server and had a quick play with an odt version of a NIH grant (US National Institutes of Health) I'm collaborating on at the moment. Not too shabby - unlike google docs it doesn't completely bork the page formatting and the collection of styles we use to keep it in line with the (typographically absurd) requirements of the NIH (oh, SF424, how I hate thee). Which is a big deal, because most of the sections required in an NIH grant have strict page limits (and required fonts, font sizes, line spacing, and margin limits), and getting right to those page limits without going over is important. So when you've finished collaborating and are ready to download the final document, with google docs a) you have to reimpose those margins, fonts, etc which is a pita; and more importantly b) you run the real risk that on reimposing those margins, fonts etc the page count will change, requiring another whole round of editing to get it under the required page count. Whereas this appears to keep the document in odt the entire time and hence there'd be no nasty surprises at the end.
Having said all that, there's no way to add citations. Google docs has a close to useless implementation of citations (imagine 5 scientists collaborating on a document, each of whom have their own citation databases with thousands or tens of thousands of entries, and then go and have a play with citations in google docs. Try not to giggle too much when you realize how well that'd go..). But given open/libreoffice has really good integration with zotero, and zotero is also open source and browser based, it seems like these two could be made to talk to one another, which for academic collaborators would be a HUGE feature, jumping it way ahead of any other collaborative tool I've ever seen. And believe me, collaborative writing is so central to my work that I play with *anything* that looks like it might be an improvement on google docs or the nightmare of emailing around multiple copies of a document with 'track changes' in heavy use.