Both my good friend and colleague Tom Erik Holteng and I have previously talked about simple tools that can be used to create a feeling of interactivity between the student and the teacher. This interactivity is important to stimulate the cognitive processes of the student and together with true projects aimed at stimulating the intrinsic motivation; distance education might indeed be quite successful.
This is not to say that just utilizing different tools for interactivity and having a project-based approach will help you reach all of your students. Online learning requires that the student have dedication, persistence, study skills, and motivation, and is not for everyone. But for those who have the necessary qualities you might help them to better learning by using a set of different tools.
And the good thing about distance education is that you don’t have to wait for your institution to buy expensive and advanced tools. Personally I am a great believer in the principle of K.I.S.S – Keep It Simple Stupid, so take a look at Jane Harts Directory of free e-learning tools.