After working for bi-coastal companies, remotely, since 1999, I am excited to be working for a local company now. While I would consider my remote situation with Netscape, then AOL, highly successful, it took an immense amount of energy and resources to make it work. Furthermore, my ability to impact corporate direction was certainly impeded, and I was not able to pursue all of my career aspirations. Finally, these impediments have been removed, and I no longer have to contain myself.
Role and travel:
The amount of travel you have to do is purely a function of your role. The more self contained and independent your role is, the less travel you have to do. The more broad and people-influential your role is, the more travel you have to do. I fell into the latter bucket, so I had to travel, generally, at least a couple of times per month; sometimes more, but sometimes less. I found regularly scheduled travel to be a nightmare, and preferred a more fluid schedule. The former just made me feel like a commuting chump. The latter made me feel like I was in control of my schedule.
I've managed a global software engineering team, and it worked great. I've also been a programmer while working remotely, and it worked great. The act of software engineering can take place anywhere. Is it convenient when everyone's sitting in one building; sure, but it's not a requirement?
When you get into management and advisement roles, things get a little more difficult, and travel kicks into overdrive. One's ability to influence is still largely a function of physical presence. You have to be there to show others in the conference room who you are, what you think, and why you're taking them in a specific direction. You have to be walking the halls to impact the human side of working together. There are exceptions to these rules, and they generally fall into the "chief" level job categories. There are many successful CEOs that travel non-stop. They're able to do so simply because the buck stops with them. They don't have to influence people to get them to do things, they simply have to ask them to do things.
Throughout my telecommuting tenure, I broke it down like this. In descending order, the most effective means of communication are simply: face-to-face (requires travel), video conference (Kinko's/FedEx solutions, webcams, etc), hardline phone (good 'ol copper-wire twisted pair), mobile/soft phones (e.g. Skype), instant messaging, and finally email.
To be clear, I'm not suggesting you can't influence and impact projects remotely. It's all just a function of your industry and role. Open Source projects are prime examples of massive projects that succeed in an incredibly distributed work environment.
Working at AOL, we had on-campus video conferencing solutions of the million-dollar-per-room variety. While they provided incredible video and audio, using life-size screens, and rooms designed for video-conferencing, there is a new breed of solution coming to the industry that is looking to be much better. Business Week recently wrote a good article outlining where things are headed. One of the great things about most of these high-end solutions is that Kinko's/FedEx can generally link you into the corporate/home-office using their in-store solution. This means you can drive to your local Kinko's office and connect to your companies' video conference solution for roughly $250/hour, rather than spend $1,000 traveling to and fro; great savings.
Peer-to-peer solutions, such as iChat/iSight, are great for just that, peer-to-peer. However, if you have a group conference taking place on a regular basis, it's nice to step it up to wide-angle lenses, and more dedicated hardware.
Being remote, you have to be more accessible than your average Joe. Getting creative with call-forwarding scenarios is advisable. You also need to go out of your way to be highly responsive to calls, IM, and email. Lag-time in communication can be a big issue if you're not physically present. All of this can be a drag because you have to stay on top of your availability more so than if you were bumping into people everyday.
Don't stay in a role that requires a lot of travel for too long if you have to travel on the cheap. Crappy connections, flights, airlines, cars, and hotels, will drive you into the ground. I was lucky and was able to travel comfortably, and it was still a back breaker. Traveling any lower on the scale was un-imaginable to me.
I really enjoyed spending time in some great cities across the globe. Those experiences have been incredible, and I would trade them for anything. If it weren't for corporate travel, my world would be much, much, smaller.