It seems there's going to be more to this than I originally thought.
A collaborative space for musicians/audio engineers would make a
KILLER web app. It really could be a billion-dollar idea even if all
the music were free (as it should be)
My head's kind of spinning right now, but here are a couple of thoughts:
Format(s): Vorbis and midi -- conserve bandwidth/storage, keep it
simple and almost universal, and maintain enough quality to make the
projects worthwhile... wav is not feasible and FLAC not universal
enough.
Organization: hmmm... name each project, start with a basic track and
build from there. Everyone has download rights but only invited
collaborators have upload rights on any given project (just to keep
things manageable) -- of course anyone can request to be invited to
participate in any project if they like what they hear (?)