We have a nice set of available, well-maintained tools used in the Apache Project for allowing our distributed development process to work.
Most important among these is CVS, or Concurrent Versioning System. It is a collection of programs that implement a shared code repository, maintaining a database of changes with names and dates attached to each change. It is extremely effective for being able to allow multiple people to simultaneously be the ``authors'' of a program without stepping over each others' toes. It also helps in the debugging process, as it is possible to roll back changes one by one to find out exactly where a certain bug may have been introduced. There are clients for every major platform, and it works just fine over dial-up lines or across long-distance connections. It can also be secured by tunneling it over an encrypted connection using SSH.
The Apache project uses CVS not just for maintaining the actual software, but also for maintaining our ``STATUS'' file, in which we place all major outstanding issues, with comments, opinions, and even votes attached to each issue. We also use it to register votes for decisions we make as a group, maintain our web site documents with it, manage development documents, etc. In short it is the asset and knowledge management software for the project. Its simplicity may seem like a drawback -- most software in this space is expensive and full-featured -- but in reality simplicity is a very strong virtue of CVS. Every component of CVS is free -- the server and the clients.
Another essential element to an open-source project is a solid set of discussion forums for developers and for users. The software to use here is largely inconsequential -- we use Majordomo, but ezmlm or Smartlist or any of the others would probably be fine. The important thing is to give each development effort their own list, so that developers can self-select their interests and reasonably keep up with development. It's also smart to create a separate list for each project to which the CVS server emails changes that get made to the CVS repository, to allow for a type of passive peer review of changes. Such a model is actually very effective in maintaining code standards and discovering bugs. It may also make sense to have different lists for users and developers, and perhaps even distinguish between all developers and core developers if your project is large enough. Finally, it is important to have archives of the lists publicly available so that new users can search to see if a particular issue has been brought up in the past, or how something was addressed in the past.
Bug and issue tracking is also essential to a well-run project. On the Apache Project we use a GNU tool called GNATS, which has served us very well through 3,000+ bug reports. You want to find a tool that allows multiple people to answer bug reports, allows people to specialize on bugs in one particular component of the project, and allows people to read bug reports by email and reply to them by email rather than exclusively by a web form. The overriding goal for the bug database is that it should be as easy and automated as possible both for developers to answer bugs (because this is really a chore to most developers), and to search to see if a particular bug has already been reported. In essence, your bug database will become your repository for anecdotal knowledge about the project and its capabilities. Why is a particular behavior a feature and not a bug? Is anyone addressing a known problem? These are the types of questions a good bug database should seek to answer.
The open-source approach is not a magic bullet for every type of software development project. Not only do the conditions have to be right for conducting such a project, but there is a tremendous amount of real work that has to go into launching a successful project that has a life of its own. In many ways you, as the advocate for a new project, have to act a little like Dr. Frankenstein, mixing chemicals here, applying voltage there, to bring your monster to life. Good luck.