Some great feedback overnight! Let me try to address everyone's issues at once:
Thomas, I had looked at your extension briefly, but realized that, while it would be nice to have pads _in_ pages, it would take some extra work to use them to edit--this included API calls, for example, so I couldn't really use what you had done to that point. I used the previous attempts with WikiEditor, at least for a start: http://svn.wikimedia.org/viewvc/mediawiki/branches/extensions-realtime/
Martijn, it should only take a little while to hammer out the kinks in this extension. Then again, it's rather difficult to judge the difficulty of something when I haven't fully defined how it will work! There should be more details about that later today, hopefully then I can update you.
Sebastien, one of the things I need to define is how edits happen, i.e., what happens when User A clicks "submit". If we just save the text and delete the pad (as now), then yes, very little else is possible. I'm sure the final implementation will determine the author(s) who modified the pad, and include that information somewhere.
Ryan, you're ruining my "rule with an iron fist and random data deletion" strategy! The point I wanted to get across was that A) it's not likely that this wiki will be up at any give point and B) the data may very well disappear, depending on how I need to change the system.
Petr and Thomas, I've put the etherpad instance behind a reverse proxy now, and configured it so the extension uses the proxy rather than the actual instance. Now http://etherpad.wmflabs.org/pad will act as a reverse proxy rather than a simple redirect!
Sumana, I'm on my way to add some notes there, and I've already mailed Ashish about the extension. (and sorry about that duplicate I sent only to you, I need to enable reply-to-list by default on my mail client)
From the feedback page: There's some concern about revisions being saved. Those revisions will be lost anyway, so it's probably a good idea to just disable that feature somehow. I'll dig around in the Etherpad Lite configuration to see if it's possible, else maybe I'll add another plugin for that purpose.
Also, the chat window can overlap the pad itself, but there is a minimize button on the screen, so be sure to use it if you need to. I will consider making the iframe a bit bigger, though.
Finally, yes, the three buttons at the bottom of the page currently all submit the form with the same action, so there's no "preview" or "show changes" yet. I'll work on that later today as well.
Thanks again for all the help, and keep it coming! :)