If you want to setup the software development team but your developers working from different locations, probably you might think how to setup and centralize the source code. Development tools like Visual Studio 2005 & 2008 with integration to TFS should cover this problem. Other development tools also have its own source controlling feature. But usually they required license and its pretty much expensive for small team - maybe.
There are a lot of source control tools outside and they are free, but have you got a nice combination with your current Visual Studio 2005 or 2008, licensed or the Express version, and you can add the plugin for subversion (SVN) into it, and the plug in is free. Get it from here http://ankhsvn.net/downloads/2.0/
Then you need the subversion server, and once again you can install the VisualSVN server with free license and you can download from here http://www.visualsvn.com/server/ . The plugin version of VisualSVN is licensed with $50 per seat.
For sure you also can use the stand alone subversion client like Tortoise SVN to manage the controlled file from Windows explorer.
By combining those tools above, you can build the team and start to develop whatever application with your team, working from everywhere.
Then you need to think how to communicate the requirements within your team, and I think you already have some ideas.