I have similar thought on local team vs a remote team. From what I have seen it does look like the product and complexity of what you are building comes into play. I am into game development, and I have seem some studios operate completely independently collabrating from various places. They have never worked under a roof. That is what the sell to to the talent "Freedom" to work from anywhere.
But yeah, I do agree it does come with challenges where it does feel like a long distance relationship. The founder/owner of this gaming company "boomzap.com". It took a while and couple of success titles before they got to where they are now. They have a system in place where every one need to checkin every thing by end of the day, and it is validated and how much work is done etc.
Well I am curious and looking into some interesting models like, the team is measure by what is done vs how much time you have put in. As this might be the main concern if the team is not local.
- Quality, Communication and Getting things done Matter at the end of the day! couple thoughts and lets see what other have to add to this thread.