"...communication and collaboration was still the dominant challenge in distributed development with more than 85% respondents mentioning it, the surprise second, as per the survey, was software quality issues arising from too much variation in skill sets between sites" (see http://www.infoq.com/news/2008/12/distributed-development-quality for more information).
This was one of the conclusions from the survey (September 2008) described in the attached link, but the top identified issues are practically the same, even if some changes have occur in the hierarchy
- General communication and collaboration challenges
- Software quality issues due to variable level of skills between locations
- Political issues with the way organization is structured
- Quality concerns due to difference in processes/practices
- Project management issues caused by complexities of distributed development