I think it sounds like a great idea, even though I've survived more than a couple failed continuing story projects already. (I'm involved with one now that, I think, has been awaiting its next chapter for about four months.) As long as we establish some ground rules and agree to follow them, I think we should be fine. It could get a little complicated if whoever's next on a given day
doesn't post, or if there's a rush of posts competing with each other as the next installment. (That, of course, would require more than one or two of us posting in a day, which has proven an increasingly rare occurence.) I think Ben's got a good idea; some kind of numbering system might actually help eliminate confusion, as well as encourage more people to write.
Again, some simple ground rules are probably all we need. I'm certainly interested to see where it takes us.