That's an open ended question with a lot of answers to go with it...

Here's my shot at trying to answer your question:

VPN is definately a viable alternative. This will allow the developer to tap into your VSS Database and work locally on their machine where they are working in a familiar environment.

However, if you're worried about the particular environment or licensing issues you may want to have them remote into a machine on your network. Especially if they don't already own all the necessary software needed to complete the job. Keep in mind that performance isn't always on the side of the person who is remoting. Remoting for long term can be frustrating at times. However, you can be sure that whatever software license you purchase will remain on your machines and on your network.

An alternative to VPN & Remoting is http://www.gotomypc.com (I don't mean to plug-in) which offers just about everything Remoting offers without having the complexity and having to "punch holes" into your firewall to allow VPN connections.

Of course there is always the dreaded question the quantity of work being performed. Is it fair for everyone else working a fixed set of hours while one person can work when they feel like it...?

For me, remoting works for emergency situations such as after hour "firefighting" mode or weekend catch-up work to avoid driving into work or even dressing up to appear decent at the office. I wouldn't consider remoting for everyday work...

Of course you'll probably get a bunch of contractors and consultants to chime-in and contradict my position - but I stand firm on my statements. I just don't think it's fair for those that have to work a fixed set of hours. Either allow everyone remote access and work from home in their P.J.'s or only allow access to remoting during the extended hours. Or emergency cases - keep in mind that emergency cases shouldn't happen everyday.