What is Etherpad used for?

It's a "multiplayer" text editor. When you work with someone on a document on Etherpad, instead of typing a section, saving your work, and sending your collaborator an updated copy, you type in the app and your collaborator sees you typing as you type. They can type too, at the same time, and you see them typing as they type. So that saves you the extra steps of one of you opening a document and looking through the changes and transferring them to an internal copy. The changes all happen to a shared copy, in real time. And that's really smooth, provided that you trust the other collaborators.