This was an idea that myself and some friends used back in high school after taking a creative writing course. In the class we were required to start a story writing one to two paragraphs, then pass it back to the next person who did the same after reading the previous material. Each person read and then added to the paper. At the end of the exercise the story was read to the class to see how it developed and where it had led. There were no restrictions on each writer other than no vulgarity (we were in school). Needless to say, it turned out outrageous and hilarious.

My buddies and I loved home-brewed games more than any campaign setting. We applied this exercise to one such game. Each week a different person in our group would DM the game, writing his adventure and building off of the material that had come before. That person's character would either be writen out for that session, or played by another player. This prevented people from giving an advantage to their own character. And just like the story in class, our adventures were wild and crazy. I highly recommend this round robin style for everyone, especially for those groups that have people that like playing and GMing, or want to give either a try. It's loads of laughs and tons of fun.