Comment Agile (Score 1) 175
The answer is you have to be agile. It has to be a team effort where dysfunction is caught by the team, not by you. Distributed scrum works well for this. With distributed scrum, the tool is very important. Trac/Agilo, Pivotal, JIRA/Greenhopper, etc. You need to make sure that you motivate everyone toward a goal and make the success of the team more important than the success of any individual.
Make sure you have a real-time communication mechanism, jabber, IRC, mumble, etc so that people don't feel isolated. Distributed teams can absolutely work well. You should definitely schedule some sort of face to face interaction at regular intervals to encourage team building and planning for larger projects/problems.
~B