An article in CIT that discusses the online tools for research collaboration says, "Faculty who find themselves outgrowing the ‘external links’ page on Blackboard, or constantly emailing new websites and/or web articles to your students, might want to take a look at two technologies created specifically for gathering and sharing web resources: Google Reader and Diigo."
However, my experience has been very different. I often use google reader but that is for updates on news and blogs and not for scientific collaboration. I had used Zotero extensively, especially because it can be used as a plug-in in Firefox and it can automatically save the full reference information for the item in the correct fields. Zotero stores the author, title, and other metadata in a publication and I can export it as a formatted reference elsewhere. However, Zotero stores the information on the local computer. Because I use search engines for searching scientific literature extensively from home as well as at work, I had difficulty combining the two.
Then came 2collab, developed by Elsevier. I was involved in it from the initial stages and got it for the IISc library as a developing partner with Elsevier. Unlike Zotero, the bookmarks are stored on the server, which I can access from anywhere. I can now store, categorize, manage and share the bookmarks. I can import bookmarks from Firefox or from any other bookmarking sites like delicious and connotea. More importantly, I do most of my searches from Scopus and I can directly bookmark these. I can export these references in the format I need. I also send or share these bookmarks to various research groups.
I am aware that the number of databases available with 2collab is much smaller (at least for the moment) than that available for its competitor, CiteULike, but because I use scopus extensively, it suits me. Your mileage may vary.
However, for collecting reference data and generating formatted references in a wide variety of styles and putting it in Word etc, I used a free software called Biblioexpress.