Storybird is a collaborative story writing tool. The site uses an amazing collection of art to inspire students' story writing. The artwork is easily added to the story interface by a "drag and drop" feature. Students are then able to create their accompanying story.
The site is very student and teacher friendly. Teachers are able to create accounts for students without the need for student email. Collaboration on stories can happen within a class, or across the globe.
Shawn Avery has also done a great post about Storybird on his blog, Tech Tutorials. The videos posted below are from his site, and he does a great job explaining the many features of Storybird.