Distributed teams face challenges like differences in language, culture, and time zones that can lead to problems like poor requirement comprehension, missed deadlines, and low quality work. However, these challenges can be addressed by establishing respect between teams, sending representatives between sites, aligning iterations and estimations, creating multidisciplinary teams, improving communication through tools like Scrum of Scrums, and relentlessly integrating and reviewing code. The key is reducing dependencies while increasing awareness across teams.