As for the GM issue, collaborative writing is good and all but in my experience the best way to move a story forward is to have one of the players direct a sort of a 'plot' to push things along. That player can be switched periodically, but basically he'd control most of the NPCs, bring up new situations and such. Otherwise either the players start drifting into their own plots which they each push individually or the story stagnates as nothing really happens.
As for the system, I like freeform. System would at most be the one directing the situation choosing a number and rolling a dice, if the success or failure is in question. My best games didn't even have that, the GM just decided the results based on common sense. System games make it harder to switch around the GM mid-game. However, if someone has a system they want to try, I can always learn new ones.
As for the setting...
It's a scifi setting worked on mainly by me and a friend for a MSN-based freeform game which died later. We had a couple other people help with ideas aswell, but as the plan was to construct the world in greater detail as the adventure progressed(we made a great fantasy setting this way before) I'm of the mind to scrap most of the details and start anew with the basics:
Three Empires is the name. As the age for space exploration was dawning on Earth, human ships discovered an odd phenomenon near the orbit of Saturn in the Solar System. It was a sort of a 'wormhole', which, once stabilized by human science, could be used to travel. All the experiments worked out, and after a while, the system on the other end, in another galaxy entirely, was home to the first colony of humankind, somewhat boringly named Eden.
Technology advanced, and effective sub-light drives were built for in-system travel. Gates were developed from the wormhole data, allowing humans to link two systems to an instantaneous transit net once the other end of the Gate had been moved into position via a sub-light drive. Colonization efforts started with Earth and Eden as the two main hubs, and a golden age dawned on humankind.
Then, the Crash happened. In what is suspected to be a terrorist attack, the stabilization net around the Earth-Eden wormhole was destroyed in a spectacular explosion. This completely cut off one half of humanity from the other, and resulted in a widespread economical and political chaos. On the Eden side of things, without an official government, the colonies splintered into warring factions, until finally a group of military officers controlling the largest portion of the fleet left took over Eden in a coup, and during the next few years forced all the other colonies back into the fold. This marked the creation of the Eden Federation, which proceeded to stabilize their dominion and finally, after decades of stagnation, allow humanity to continue colonization and spread out over their new galaxy. Any efforts to re-establish contact with Earth, way over in another galaxy, were doomed and finally Earth faded away into just another legend.
In time, the problems within the Federation became imminent. The bureaucracy was simply too inefficient to properly govern the overextended colonies, and too corrupt to let the people's voice be heard. The first act of the Splintering was when a religious sect on the planet Ness declared independence from the Federation, resulting in a cascade of other revolts all over human space.
From the chaos of the Splintering, three factions arose. The first was the new Union of Eden Colonies, UEC, which consisted initially of Eden itself and the core first-generation worlds around it. With the remnants of the Federation fleet, it established dominance over the nearby systems. The political reforms turned it into a more effective representative-based state with more say for the individual colonies in it's policies. The UEC is generally held as the successor of the Federation, and holds the core of the most developed 'Old Worlds' around the symbolic Eden itself.
The Church of the Immaculate, or by it's original name the Nessian Empire, spread from the initial revolution. Like a wildfire, it took hold over the oppressed masses of the newer colonies, and quickly became a major power. The Church holds the form of a human sacred, and views cybernetics, mutants and aliens as unclean. It is, numbers-wise, the largest faction in territory and population, but it's military is unable to cope with the advances of cybernetics widely spread in the other two groups. However, their weapons are still strong, and they've been butting heads with the UEC often.
The Marek Federation is a loose coalition of the worlds in a rich area, with the leading producers of entertainment, tax paradises, tourist worlds and others joining together for mutual protection during the chaos of the Splintering. They found out they liked the freedom this provided them, and with the threat of heavy taxing and being forced to lift up the lesser worlds they refused to rejoin the UEC or the Church afterwards. Currently, they are the militarily most weak of the three factions, but everyone is dependant on their goods, they have the money and their espionage and technology is the best.
The groups are still officially in a state of 'war', but in actuality limited traffic and a flourishing smuggling scene flows through the borders, and the factions cooperate on certain matters. The 'Scraps', or neutral worlds, still exist, but all the factions eye them hungrily, trying to influence them to join without inviting reprisals from the other groups. Indeed, the last major confrontation was a failed Church attempt to take over an UEC-affiliated world twenty-four years ago. The borders in the Gate network are heavily fortified and would be extremely costly to assault upon directly. Therefore, the hostilities have turned from a hot war into a cold one, with the factions vying for power and influence, and hoping to gain a position to be able to unify humanity.
The ordinary citizens are generally happy with the way things are, and with the peaceful times. But theorists who know the facts say that things cannot and will not continue as they are. The balance of power still holds... for now.
Tech level, timeline, aliens, mutants and whatever is left open on purpose to be discussed pre-game.