The Golden Rule Of Outsourcing - A Little Respect Goes A Long Ways
In this conversation - Raul Suarez - Systems Consultant at Manulife Financial explains how the key to managing successful off-shore projects lies in building relationships and treating the off-shore team with respect. Treat off-shore staff the same way you would behave to people in your own office. This applies to both communication and simple courtesy. Don't keep the off-shore people in the dark with problems you are facing and make sure to time some meetings at times that work best off-shore. The off-shore developers aren't just faceless coding automotons, but real people. Get to know them!
It also helps to have a defined process and lines of informal and informal communication.