Yep. The backing track was loaded up to box.net, and the collab was downloaded, recorded on, then uploaded back on box.net for more collaborators.

This one from January, 2008 is a good example.

http://www.thefret.net/showthread.php?t=5557

Here is one where some of the more advanced players ripped it up.

http://www.thefret.net/showthread.php?t=1878