The idea behind open-lit according to Paul Harzog is to sit up a site where "..authors create and distribute their work, and readers, individually and collectively, including fans as well as editors and peers, review, comment, rank, and tag, everything." It's an idea he first mooted in a blog entry about "social publishing."
There are obvious parallels to A Million Penguins but where AMP is an attempt to tell a single story (ahem) this is more of a social networking site for multiple stories. The site includes tag clouds, a ranking system and so on which is to say that it's full of the milk of web2.0 goodness.
One thing that intrigues me is that it's focused on sci-fi and fantasy. I'm a long time reader of the genre and I wonder if what we're seeing here is something that draws on "fan-fic" or at least the same impulse that drives sci-fi fan-fic. Fan-fic has been an area of much interest. The resurgence of Dr. Who has been driven in part by a cohort of writers such as Russell T. Davis, Steven Moffat, Paul Cornell who started with Dr. Who fan fic and still post on fandom sites such as Outpost Gallifrey.
It strikes me that there are two elements that may be pertinent to transliteracy here. One is the impulse for fan-fic to explore new frontiers. The other is an attempt to create a web2.0 style publishing venue. I suspect that Harzog has been rather smart in mashingup these two ideas.
The other thing that this points me towards is the relationship between what we might think of as transliteracy and mashups.
Transliteracy is the ability to read, write and interact across a range of platforms, tools and media from signing and orality through handwriting, print, TV, radio and film, to digital social networks.