We had a bug that, for some accounts, Dropbox and Basecamp txt files were not converted into Google Docs format. So these txt files were not editable in Google Docs.
We have fixed the problem and now converting of txt wiles to Google Docs format works for ALL accounts.
This also means that our Google Chrome Extension will be allow you to edit any Dropbox and Basecamp txt files directly from a Google Docs interface.
cloudHQ Team.