I've been doing some online collaborations for several years over at Mixerman's site:
The CAPE Zone - The Womb ... They've got it down to a pretty good method now. I didn't do CAPE 7 because my studio is in complete disarray at the moment and probably will be until Spring.
I suggested doing a collaboration here several years ago, but never really got anywhere with it.
I would suggest setting up an FTP site for tracks rather than MySpace. MySpace has been dogged lately ... I can hardly log in sometimes. I wouldn't mind donating space for FTP; I've got a couple of domains just sitting empty.
One thing about the CAPE projects is that they only do originals. It starts with the person in the "songwriter" position submitting one or several lyrical ideas for a song and maybe simple chord structure or melody. A guide track is created by the songwriter, the producer or someone in an arranger role. This usually consists of singing and maybe rhythm guitar or piano; preferably to a click track.
Then the song is tracked bit by bit from rhythm tracks up to vocals along side the guide track. Eventually the guide track is removed and minor changes can be made to the core of the song.
It's not unusual to scrap a guide track in favor of something new at some point.
If you decide to go the original route I'll throw in my keyboard and arranger skills; I'm not so sure about doing a cover.