NEAR THE COMPLETION OF A DUAL INSTRUCTIONAL FLT WITH A PRE-SOLO STUDENT, THE CFI FOLLOWED THE PROCEDURES RECOMMENDED IN THE AIM 7 & ANNOUNCED HIS CESSNA ACFT'S POSITION OVER THE CTAF STATING HIS INTENTIONS & IDENTIFYING HIS LOCATION ON THE 45 DEG. ENTRY & DOWNWIND LEGS. THE CFI FAILED TO TRANSMIT HIS POSITION ON THE FINAL APPROACH LEG, & FAILED TO OBSERVE A PIPER ACFT ON ITS TAKEOFF ROLL. THE PLT IN THE PIPER ACFT, WHO WAS PREPARING TO DEPART, FAILED TO ANNOUNCE HIS INTENTIONS & POSITION ON THE TAXIWAY/RWY, FAILED TO OBSERVE THE INBND CESSNA & RENCE FAILED TO GIVE THAT ACFT THE RIGHT-OF-WAY AS REQUIRED. AS THE PIPER WAS BEING ROTATED FOR TAKEOFF THE CESSNA DESCENDED ONTO & COLLIDED WITH IT. THE PIPER PLT ABORTED HIS TAKEOFF, & THE CESSNA LANDED WITHOUR FURTHER MISHAP. BOTH PLTS REPORTED THAT THE PRESENCE OF TALL TREES LOCATED ADJACENT TO THE RWY'S APPROACH HAD OBSTRUCTED THEIR VISION.