This is a paper from my colleague Ade Miller at Microsoft. It is about Distributed Agile Development at Microsoft patterns & practices. It's a good read.
Distributed development is a fact of life for many teams. Unfortunately most agile methodologies or approaches assume that the team is located in a single team room. Until recently there has been little guidance about how to apply these approaches with a geographically dispersed team.
Microsoft’s patterns & practices group has been following an agile, distributed development approach for the past five years. During this time teams within the group have experimented extensively with different approaches to best address the challenges of distributed agile development. This paper outlines the challenges faced by geographically distributed agile teams and details some proven practices to address these issues and build successful distributed teams.