Managing Distributed Teams

What is a 'distributed team'? Why are distributed teams such a key part of development initiatives? What tools are out there to help me manage a distributed team?

• Basecamphq project management software (...as a service, monthly fee) see basecamphq.com/
• Pivotal Tracker for Agile project management (...as a service, monthly fee) see pivotaltracker.com/
• activeCollab for project management (installable or as a service, mixed pricing) see www.activecollab.com/