Well, this is something there is a lot of discussion of in places like Wikipedia.
One of the arguments has a corollary with other collaborative projects such as Linux and other open source software development with the idea that "Given enough eyeballs, all bugs are shallow". In other words, with enough people reading an article, factual errors will be phased out. I would have to agree with a comment made often on Wikipedia that the system works surprisingly well for such an anarchic free-for-all. For example, on the day when the number of genes in humans was recently lower from a 30k-35k to 20k-25k estimate, I went to change it on Wikipedia and saw it had already been changed within hours of the announcement. You can probably test this yourself by going to a popular Wikipedia article such as George W. Bush and posting some factual error. Whether it stayed or not would depend on how outlandish and subtle it is. "George W. Bush is seven feet tall" would probably go within the week. A made up fact like "George W. Bush is a vegan" would probably be removed although more subtle stuff like "George W. Bush was briefly a vegan at Yale" might possibly stay. Someone purposefully seeking to introduce subtle, false information would probably succeed. The Bush page is a good barometer though because not only is it popular, it is a contentious page, so people are more apt to revert something entered. Although I managed to get into an edit war with a Renaissance buff on something as obscure as Wikipedia's Giordano Bruno page.
Wikipedia is often compared to Encyclopedia Brittanica. In fact, Wikipedia is making EB look like a dinosaur and an ex-EB editor-in-chief recently wrote an article decrying Wikipedia. He wanted to see how Wikipedia dealt with Alexander Hamilton and said the article was a "high school student C+ paper", and showed how the article had actually gotten worse with subsequent edits, with correct information replaced with incorrect information.
I in turn look for the 1911 Encyclopedia Brittanica entry on Robespierre:
"Like thousands of other young Frenchmen, he had read the works of Rousseau and taken them as gospel. Just at the very time in life when this illusion had not been destroyed by the realities of life, and without the experience which might have taught the futility of idle dreams and theories, he was elected to the states-general."
Since the 1911 EB is public domain nowadays, it was imported into Wikipedia. I deleted much of the above and marked it "point-of-view".
A look through the 1911 EB shows in hindsight how much of the 1911 encyclopedia was crap from people who had no idea what they were talking about - ( http://www.1911encyclopedia.org ), and I'm sure in another century we can say the same about the current 2004 edition of EB. Compare the EB article on phrenology with the Wikipedia one.
Wikipedia has a lot of "History of [Country]" articles - History of Nicaragua, History of Italy, History of Kyrgyzstan. If you look around, you realize this all came originally from US State Department brief sheets before people started modifying them. In fact, so much information from on high comes to us like this. I prefer the bottom up method. I don't consider Wikipedia to be as bottom up as I'd like either, but at least I can have some say.