Since 1960, we have fought for a world of deep electronic documents-- with side-by-side intercomparison and frictionless re-use of copyrighted material. We have an exact and simple structure. The Xanadu model handles automatic version management and rights management through deep connection (Intertwingularity).
Someday it may ship. OK, bits of it have shipped (ZigZag), and some are close to shipping. But I'm afraid it's the ship that's already sailed. The Web has already won, in the ultimate proof of Worse Is Better.
The snarky history (1995) by Gary Wolf: http://www.wired.com/wired/archive/3.06/xanadu.html
"The Open Society and its Media" (1995) by Mark Miller, Dean Tribble, Ravi Pandya, and Marc Stiegler. What we have built is something that has many of the best aspects of both Writing and Conversation (see Table 16.1). Many of the aspects of each are complementary. Many virtues of conversation make up for flaws in writing and vice versa. We found ourselves building a system that supports the dynamic give-and-take of conversation, and the persistence and thoughtfulness of literature.
cf Abora Hypermedia Project: Abora was (2001-2005) an ongoing project to implement and nurture information systems that enable individuals and groups to create a rich literature of long lived works. The interconnected nature of documents will be supported from the core up through quoting and fine-grained typed links.