Update: Dead Island Update Brings Online Coop
Dead Island is officially online for Steam users. When in a game, if someone with similar game progress as you is nearby, it will prompt you with the ability to join this player. For Steam users, you are now able to invite Steam friends to your current game. That player will have the option to either play as one of their current characters or create a new game. If their character is in a lower level than yours, their progress will not be saved.
Now for the issues… Users cannot currently turn off in-game voice broadcasting, so if you play with someone with a microphone, you will likely get horrible feedback. They need to add two options to the options menu; An option to disable / enable auto voice broadcast and an option to enable push to talk. Hopefully Steam / Deep Silver will collaborate to fix yet another issue with Dead Island soon.