On March 14, 1996, at 1328 hours Pacific standard time, a Cessna 172L, N7668G, collided in flight with a Cessna 172M, N20858, while entering the traffic pattern at the Napa County airport, Napa, California. After colliding, each aircraft continued on its approach and landed without further incident. Each aircraft sustained substantial damage; however, neither pilot was injured. Each aircraft was being operated as a personnel flight, N7668G, by the pilot/owner, and N20858, by Vintage Flyers, Inc. Visual meteorological conditions prevailed. No flight plan was filed for N7668G; however, a VFR flight plan was filed for N20858. The flight of N7668G originated from Petaluma, California, earlier that day, while the flight of N20858 originated from Napa about 1321. According to the pilot of N7668G, he reported over Schelleville and was cleared to enter right traffic for runway 18R. He was told to report entering downwind for runway 18R and to watch for other aircraft in the pattern. He was on a 45-degree entry preparing to turn downwind when he saw another aircraft 200 to 300 feet to his right. He turned left and asked the tower ". . .how this airplane got there. . . ." The tower operator directed him to turn left. He replied that he ". . .already had. . ." and was continuing to do so when a few seconds later he felt a bang on the tail of his aircraft. He notified the tower of the collision and was asked to confirm the accident in reply. He replied "Affirmative, I got hit." The pilot was able to maintain control of the aircraft after the collision and was cleared to land without further incident. The pilot of N20858 stated that he was established in the pattern, turning downwind for runway 18R, when he saw the other aircraft about 100 feet away approaching directly from his left. He made a hard right turn and dove the aircraft attempting to avoid a collision, but felt a bump a few seconds later. After the collision the pilot called the tower operator and reported the accident. The pilot was asked to verify that there had been a collision and was then cleared to land without further incident. A transcript of the air-to-ground communications tapes at the Napa air traffic control tower (ATCT) was reviewed. The tower operator cleared N7668G for right traffic on runway 18R and to report entering downwind. He advised the pilot that there were two Cessnas in the pattern, which the pilot acknowledged. The aircraft did not report entering downwind as requested. Just before the collision occurred the local controller instructed the pilot of N7668G to "turn downwind now." He also advised him that his traffic was a Cessna to his right. The pilot's reply was ". . .right next to me. . . ." The tower operator called to verify that the pilot had been involved in a collision and then cleared him to land without further incident. (A transcript from the Napa ATCT tape is appended to this report.) A postaccident inspection of the aircraft revealed damage to the leading and lower side of the left wing tip of N20858. There was also damage to the outboard trailing edge portion of the right elevator and horizontal stabilizer of N7668G.