I heard on Lets Talk Bitcoin a few nights ago that the Zerocoin protocol is being developed for NXT. Does this mean that NXT is developing a Zercoin-like protocol or have the Zerocoin developers decided to build on top of NXT? Are the developers working together?
Neither. A few people (including jl777) are interested in developing NXTcash, which is an implementation of Zerocoin ON TOP OF Nxt. To date, the Zerocoin folks have not responded to overtures from these Nxt folks -- but the Zerocoin library is open-source and so they're moving ahead with it anyway.
You will hear more and more about people building things on top of Nxt. Think of Nxt as a low-layer protocol. Everything built on top of it is independent. Like Nxt itself, nothing is "official" or "centralized".
The fact that Nxt can support such a diversity of applications and uses, supported by a lightweight PoS blockchain, is part of its appeal.