After much planning we're going to be building on, and heavily modifying some CMS software.
There are going to be three to four developers working on the project with myself overseeing work.
They will be working from a single document listing features to be made.
How do we go about bringing these developers together, ensuring they collaborate in real time effectively and smoothly?
Ideally we are looking for a free or cheap solution.
You'll need two things: a version-controlled repository for code, and a networking tool. Virtually any IM software will take care of the latter part; something like Skype would allow you to send messages, files, videoconference, etc. There are other messenger programs that allow viewing a user's desktop (useful for remote pair programming) but they generally cost money.
For a code repository, look at setting up a SubVersion server. SVN is free, as are Windows and Linux tools to work with a server. For a truly open-source project you can open it up to everyone, or you can put it behind authentication; your choice, either way it communicates over HTTP making it suitable for Internet-based collaboration. There are of course other version control servers you can use, and there are online sites that specialize in codebase hosting, sometimes free of charge.