If you are interrested in Distributed Dev Teams (aka Virtual Teams) and Agile Development this white paper is a must read.
Some parts of the white paper:
...While there may be business reasons for distributing a team, distribution will also contribute to team dysfunction by inhibiting communication. Agile teams rely on intensive person to person communication, both within the team and with the customer. This allows them to forego some of the additional process—like writing detailed specifications—usually associated with a more waterfall approach. Casual conversations within the team room, in hallways, and other shared spaces make a significant contribution to the team’s collective understanding. Remote team members miss these and consequently their understanding suffers...