So I looked into it some more, the algorithm used in Etherpad is known as Operational Transformation:
The solution is Operational Transformation (OT). If you haven’t heard of it, OT is a class of algorithms that do multi-site realtime concurrency. OT is like realtime git. It works with any amount of lag (from zero to an extended holiday). It lets users make live, concurrent edits with low bandwidth. OT gives you eventual consistency between multiple users without retries, without errors and without any data being overwritten.
Unfortunately, implementing OT sucks. There's a million algorithms with different tradeoffs, mostly trapped in academic papers. The algorithms are really hard and time consuming to implement correctly. We need some good libraries, so any project can just plug in OT if they need it.
Thats’s from the site of sharejs. A node.js based ot server-client that you can hook into your existing client.
OT is also implemented in the Racer model synchronization engine for Node.js, that forms the underpinnings for Derby. At the moment, derby.js doesn’t transparently provide it yet, but they plan too, from the Derby docs:
Currently, Racer defaults to applying all transactions in the order received, i.e. last-writer-wins. (…) Racer [also] supports conflict resolution via a combination of Software Transactional Memory (STM), Operational Transformation (OT), and Diff-match-patch techniques.
These features are not fully implemented yet, but the Racer demos show preliminary examples of STM and OT.
Coincidentally, both the sharejs and derbyjs teams have an ex Google-waver on board. Meteor has an ex etherpad/Google Waver in their core team. Since Etherpad is one of the best known implementations of OT I was imagining Meteor would surely want to support it at some point as well…