James Robertson has a blog entry today (see link) discussing the problem of time zone differences when outsourcing an entire team to India.
That makes some sense to me. It seems like a combination of U.S. and Indian workers solves the time zone problem and also allows round-the-clock development.
Still, cost savings for using teams in India, Eastern Europe, etc. can be substantial. I
think that it all comes down to minimizing the total cost of software (obviously including maintenance and feature enhancements).