The devil is in the details.
Agree 100%.

Would you have to hire a neutral arbiter at
every location to make sure the players don't cheat?
You gotta have *someone* who actually cares about the integrity of the game
to make sure cheating does not happen. Otherwise it's a waste of time and
effort.

Who supplies the
computers and internet connections?
Most likely chess clubs that already have these facilities can provide that
as an added service to their members or to whoever wants to use the
facilities for a fee.

And what about problems of lag, broken
connections, etc.?
This needs to be worked out for sure...

It would certainly be messy the first few times, until people worked out
the
kinks.
I think there's is potential in this to allow for even greater participation
in tournaments. Let's face, money is always a problem in chess, especially
for those that can't devote themselves to the game fully and/or can't
travel. The internet removes geographical barriers that hinder
participation.

However, if I'm going to pay $50, $100, $200 for a tournament fee I want to
make sure that I'm playing a person. Otherwise I can play CM9K or Fritz as
many times as I want at home.

MC