Diigo (http://www.diigo.com/) is something I've used for a while, and found very useful. Google Sidewiki sounds a lot like it.

http://sites.google.com/ should be a good place to start, or some other free wiki hosting site such pbwiki.com. A wiki is good for text sharing, very easy to get started with, and allows extra functionality (cross linking, multiple pages) that help collaborate, and is also good for submitting a final report!

Using the same analogy, if someone stayed in an insufficiently secured house while the owners were away, the electricity company should be illegally selling electricity and the water company illegally selling water -- stolen goods by the example above! The thief is liable, but if the provider cannot notice any difference from their end regarding the service being provided, then they are not liable in my opinion.