Being colocated always works better than being distributed - simply because there are more rich communication channels available. Nothing beats direct face-to-face conversation.
With other words, a distributed team simply cannot be as Agile as a colocated team.
The soul is dyed the color of its thoughts. Think only on those things that are in line with your principles and can bear the light of day. The content of your character is your choice. Day by day, what you do is who you become. Your integrity is your destiny - it is the light that guides your way. - Heraclitus
subject: distributed agile working and co-located agile working