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The article descibes how the production crew pushed the envelope of video-over-IP and worked with Polycom to debug their IP-based system. There are also anecdotes of the director using the videoconferecing system to check actors' costumes and "make changes in lighting and camera angles in real time, which not only saved us time and money, it allowed us to make an overall better film trilogy".
Unfortunately, the best graphic from the hardcopy magazine isn't on the web site. The graphic shows how the first three Harry Potter movies cost $450 million. The LOTR trilogy cost $270 million. Here is the caption:
Time Warner and its movie studio subdidary, New Line Cinema, undertook a huge risk in 1999 when it decided to film all three installments of the Lord of the Rings trilogy at once. Using technology such as internet-based videoconferencing, director Peter Jackson was able to manage the monumental task at an estimated cost of $270 million. If filmed separately, the studio figures it would have cost $400 million, of 48% more.
Speaking of videoconferencing, if you are an iChat AV fan you can download a gizmo to make iChat icons streaming (or looping) video.