I had one long campaign after which on of the players and I considered doing this, but going back and bowdlerizing all the IP was a showstopper; it was obviously D&D/Greyhawk/Night Below and other adventures.
Firstly, forget having everyone write a part and stitch it together - at least not if you want it to be a real, publishable-quality novel, unless you have a gaming group of all professional writers. Because it won't be that good. If you just want to Creative Commons self-publish on the Internet though, go ahead. This is less "a novel" and more "session summaries and player homework" though.
Secondly, there's a difference between publishing "accurate" session summaries and writing a novel. There is no uncrafted story in a novel - you will need to take extreme liberties with the campaign events to put them into a real dramatic structure. At the end the book might be "open for a sequel" but you need to either wait till the campaign's over or decide you're OK with deviating more and more from its real path as you progress.
Thirdly, there may be a lot of IP issues. The game, the adventures, anything you use in it can't be from another published work (certain open licenses excepted, but in reality no). And this kind of thing is pretty complicated - if you write all the novel, it's copyright you and you deserve all the $ for doing all the work. But to the degree to which it's based on other copyrighted material you may have problems. Heck, I remember one game company - White Wolf I think - claiming it holds copyright on all the characters you make as they are derivative of its IP (not a solid claim but one that might be a problem for you). Keep in mind that an "open" license or a "free" game does NOT necessarily allow you unrestricted use of the IP. d20 SRD material, for example, is still copyrighted; you can only do with it what the license lets you, and works of narrative written fiction are not explicitly included. You have to totally understand the license around any preexisting content you plan to derive from.
As for the players, I'd have them sign releases, that's probably the best way of going about it. If you make the .1% chance of making it big (even assuming you finish the novel) then bragging at cons and whatnot is more than adequate compensation. You're all playing together, but you are writing the book, and the limited $ that comes from that is for the writing, not the inspiration. When a writer goes and writes a book on some real life organization or whatnot, they don't kick them part of the proceeds.