>I am increasing working with folks who work at home or at least work outside of our office. If someone works in the office, you have a general sense of when things are going well and how fast an assignment is getting completed.

I don't see any difference as far as project management goes. Either having the resources 10 feet from you or remotely shouldn't have that aspect. But, if you're making reference to non formal project management so just as to collect vocal feedback about what work is done and so on, yes, onsite is better. But, usually, when working on big/important projects, a proper structured project management will take place and the location of each resource shouldn't be a factor in most cases.

As for not trusting the resources when they are consultants, well, I'll have to disagree about that. If all companies would think as is, most of us around here won't be here in this forum on a regular basis. It's all in the matter of hiring the right people. That is the same as when hiring permanent employees. You'll do a good analysis of each resource you need and when times come, you'll feel ok to hire them. So, it's the same with consultants. Paste that stage, working locally or remotely won't affect that POV.

Working remotely can bring several scenarios. You can have resources working remotely permanently or occasionnaly. When working remotely occasionnaly, that means they can be present onsite for meetings when needed. But, if the entire contract is done remotely then more emails, phone calls, etc. will be initiated in order to keep track more about specific components. Additional tools can be used such as Web project utilities so anyone would know the schedule in place, the workload, the deadlines, the resources, etc.

Personally, when I lead a project or within a similar position, I prefer onsite all resources to be onsite. But, that's only my POV and I know the flexibility of having external resources works as well as I've been in that scenario myself at several occasions.