I am not aware of anything called an "essay assignment" in Moodle. Starting with Moodle 1.7, there are four different types of Assignments (see screenshot). I was referring to the "Advanced uploading of files." Which one are you referring to?

I'm affraid not : you cannot do it all in Moodle.
MSWord or OpenOffice are "local" applications that run entirely on "your" computer. So they can open and edit freely any compatible "document" that are stored on your disks.
Moodle is an online application that may allow you "viewing" Word docs throug the embedded document viewer. This is a browser plugin that know how to "display" the document, but who does not know how to change it. Major reasons of this is dued to computer security issues. Changing a document (specially in Word) assume recording some big amount of data upon your local filesystem, temporary copy of the document, and using your local version of Word. All this is really "unacceptable" in terms of system security. Too many risks of intrusions and malicious macros.
Only Microsoft with its "Sharepoint" technology offers a really "online" Word editing, but this is a Microsoft approach which (as usual) voluntarily ignore global security constraints.
In conclusion, no other way than uploading, saving, updating the student document and send him back as John said. Just identify the right "process" and it may be less an less cumbersome some time along...
You can do everything you what to do by using Google docs and spreadsheets. Create a google account and check it out...it's a really powerful application for allowing online editing of Word documents, collaboration, and it keeps all versions.
Steve

Issues arose when it came to Open Office docs and tutors not being able to open them. Comments were limited too to the comment box. Not a bad system, but not great.
So this year we've made some changes. Students will now paste their work into the Online Text assignment (or type straight in if they wish).
The big advantages is that tutor can now comment inline - i.e. in a different colour which has obvious useful benefits.
Tutors now are far happier with this system, and I imagine the students will get better feedback too.
So - my advice? Scrap the word doc system. Paste all written work into Online Text. Make life easier.
Yes, you're right; you've got a communication break-down, you've got teachers who admitidly don't know the exact terminology for what the developers have called things in Moodle. And then you've got you've got the devleopers/techies who aren't appreciatiating the user's needs (in making it a user-friendly system) and just spurting the technical reasons as to why "you shouldn't be doing it the way your doing it".
I want to love Moodle but in my years of trying I think it's lack of user-friendlyness is it's biggest downfall.
I am currently researching (and having a nightmare) trying to implement the solution that the original poster was after; being able to edit/update or save words documents straight from/to Moodle 2.1.1
It's not just Microsoft's Sharepoint that is capable of this; I have seen other VLE's (Merlin) that offer the functionality of editing word documents (in word itself) but saving direct to the web/VLE.
Ashley-
Looking back through this thread, which is pretty old, I see a couple viable solutions to the problem you pose (similar to others). The problem is the attachment back and forth of a document that is edited by multiple users (in this case the student and the teacher).
- Online Text: If the main idea is the content and not actually the software (MS Word or Open Office or Whatever). If this is the case that is what I would do because it allows for easy in-line comments.
- Advanced Uploading: This allows users to upload multiple documents. The student can upload their document and then the teacher can upload the revised document. Both MSWord and OpenOffice/LibreOffice have tracking settings for document settings. These usually are applicable on a shared document in a common folder or in a document that is mailed back and forth after revisions. I don't know for sure if the tracking tool in word will work in this setting. It is a major pain for work flow even for adults who are emailing a document back and forth.
- GoogleDocs: If the key is to have both teacher and student edit a document or if it is to have multiple students edit a document this is the way to go. They can all edit simultaneously or at different times. In my humble opinion, the word processing client (MS Word, Libre Office, etc) will likely be an antique soon, as we all move this kind of simple processing to the cloud.
I don't know much about it but I know that MS released an add-on for office about a year ago to make posting to moodle a little easier. See review here
The Microsoft Add-on for saving to Moodle isn't compatible with the latest version of moodle. This one feature (making it easier and more user-friendly) is going to be the make or break decider for the teachers working here at our school who are trying to bring in Moodle.
I've spent weeks developing our own Moodle installation (to the latest version) only to find it doesn't meet the teachers needs, it's just too long-winded and not friendly enough, they've used other VLE's that have much better intergration with accessing and saving documents direct from the VLE.
So weeks have work have gone down the drain - because I am now having to ditch everything I have done to now install an older version of moodle purely for this Microsoft Add-on, because as I have said in our moodle-meetings this has come up as the deciding factor for the teachers, without it Moodle will not used by enough teachers & departments in our school - It's too long-winded and lacks intergration.
Hi, apologies if this someone have posted this already (or if it is off-topic).