I think we're a bit of an unusual situation really, I doubt most co-writing works the way ours does.
We both have almost identical speech patterns, agree on pretty much everything, have similar interests and so on, which apparently makes it it's practically impossible for people to tell which of us they're talking to on IM or when reading notes, so I think that carries over into the writing. Perhaps it's a side-effect of being together for so long and working together on so many different things...
We develop ideas together by just talking things through, often while walking dogs together or stuff like that, and it works brilliantly for both of us. Since there's two of us it makes it a lot easier to spot flaws at that stage and make sure everything's logical and all that, and we can evolve everything really quickly.
Once we've got enough to go on, one of us writes a quick first draft. If there's a bit that doesn't feel right or isn't flowing properly while writing the other person gives advice, then after it's done we do a series of edits together.
Generally it means that we have little to change after our first drafts (both of the two recent stories were almost completely unchanged after the first draft, just a couple of details here and there), so the whole thing doesn't take all that long.