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I'm trying to find a tool where a lot of people can work on a data model collaboratively. Embarcadero has a an ER application called ER/studio which apparently comes with a repository system that acts like typical version control software. That sounds great except ER/studio is expensive and this is a non-profit and open source organization where we encourage members to even contribute small changes.

What's the best solution? Either downloadable software or a web service would work. We don't mind paying, but the cost can't go up with the number of participants...

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Have you considered a wiki? Mediawiki (the software that runs Wikipedia) is free.

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mediawiki does not allow users to collaborate on diagrams or especially ER models easily – at01 Aug 19 '10 at 18:21
up vote 0 down vote accepted

Ended up using Gliffy. Not perfect (can't do some simple things like evenly distribute objects in a selection), but is very easy to work and collaborate with.

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