The most successful one I'm aware of is Ninjam:
http://www.ninjam.com/
Though I wouldn't exactly call this "real-time" as it's designed to handle latency by
increasing the audible latency in musical increments. I tried it with a friend, and it would probably be okay for experimental stuff or if only really well-trained musicians are involved. For what I was doing, we just didn't have the chops to keep up with it.
There's an older project called "t-u-b-e" that has similar interface issues. I haven't tried it:
http://www.t-u-b-e.de/
That one is interesting because it's designed to run as a VST plugin in host software.
Lastly, the one I've been most interested in is called Musigy:
http://www.musigy.com/
The dev team won some awards for this one, and it apparently did a fairly decent job of knocking audible latency down to acceptable levels (large distances will always be a problem), but about a year ago they apparently stopped making it available. I never could find any indication as to why. You might be able to have more success in determining what/why is going on with that dev team/software package than I did, though.
There are other alternatives that cost money. One that comes to mind immediately is called "
Online Jam Sessions", which I think is primarily a paid service. They seem to have free memberships, but I didn't see any explanation of the difference. I was also put off by OSJ because they make a lot of claims that they invented this concept, when in fact the three services above beat them to the punch by at least 2 years apiece. I was also put-off by weird typographical errors in their website (like misspelling audio software products) that make we wonder how good the service actually might be. There's also some weird stuff in the fine print about what monetary compensation to the company in the event that your OSJ band makes any money...
Lastly, there is also
eJAMMING, which is another pay service that I didn't really investigate all that much because I, probably not unlike you, am primarily interested in a free or open-source service.