Its had its ups and downs, but its working better now that ever. We're using an always-on collaborative tool that removes all the friction: Sococo.com
Our project has taken 3 years and involved Engineers/managers in 4 states. We've interacted daily and in a ad-hoc manner. Now we're doing Agile development to some degree, and thats working too.
The article mentions Skype etc. We're way beyond that. Any conclusions may be stale.