I would. Because at the end of the day, all of these projects have one or two creative elements with the rest of it being just grunt programming.

Note that by solving complex problems creatively, I mean business problems. Not technology. We don't need a co-located team to figure out that a bubble sort is the wrong tool for this job. We need a co-located team to figure out that we're headed down the wrong road and that 3 months of coding might be replaced with two system calls. That kind of conversation can be extremely uncomfortable or impossible to make happen with ten folks meeting over a IM link twice a day.