Justin Frankel (the creator of Winamp) has a new project called Ninjam. Ninjam allows two or more people to jam through the net with real audio (no MIDI goofiness like past internet jamming software). It’s like Skype for musicians, though the music is delayed a few measures to keep everything in sync. You plug your instruments in, the software provides a beat. Then you find out what a crappy guitar player you are. Link.
Ninjam – Skype for musicians