I'd love to collaborate on this, one day, when I have a moment or ten ;-) I want to create a gui for my CMF products, so users who only ever run MSWord will be able to create and mark up content. There's already plenty of DHTML out there to do some of the bits. I think the main effort would be designing a really extensible framework which could layer over Zope in all its future incarnations.
I just emailed to Éric Barroca (eric@barroca.net), he has a product name MSWordDocument which uses wvware to convert word-files to html for zope. I think wvware is really good for this task and it can convert word-files into various format (PDF, Latex, DVI, html, ps wml). It's configurable via xml-files. You just have some tags like <bold><begin><b></begin><end></b></end></bold> which means that a bold text in word is rendered as <b>...text...</b>. So it would be relativly easy to change that to use for instance a custom css. Erics product already gives you the possibity to write <dtml-var "myworddocument.text"> to get the html-rendered content. cheers, oliver