Yoohoo Vegas here we come . . . . .
I have been part of teams that have done this and I have found the experience to be worth every minute and every dime. I would/will do it again in a heart beat. In fact I recommend that every team (real or virtual) try to do this at least once a year.
Here are the primary benefits we/I experienced:
Collective Action: The collaborative working together on a singular project builds respect for workstyles, skills and assets.
Onsite Working: So often our teams are working remotely, that the opportunity to work across from each other, yell at each other, tease each other in person rather than over IM banks some social capital for future efforts.
Focus: In our ADD world of competing interests that ability to truly 100% focus on one project can make all the difference in quality and in satisfaction.
Pressure: All projects expand or contract to the available time. So put the time tight. And let the pressure cook something wonderful. It forces choices. And forces choices to take the time into consideration. Since time is so often the variable that puts so many start-ups at risk -- either the wasting of it, or the assumption that there is more than there is -- the pressure of the deadline to launch is a great learning to carry back to other projects.
Outcome/results: It's done. It's launched. Oh yeah. See it? Touch it? So often we get caught up in so many things that we do our piece and pass it on to someone else to do theres. We never are actually involved in the steps that wrap it up to a successful completion. My designers and programmers loved being still and not having moved on to a new project when the marketing people had put their final touches on and the sales people were all ready for the initial invitations to engage!
My only concern with what you proposed is the time. A week is a long time. We did a full three day weekend. The advantage was that it did not take away from our primary work responsibilities as much. We didn't have to communicate to clients or partners of where we were all going to be. We didn't have to come up with contingency plans of who was going to cover what. We could truly focus our time and energy on the project.
Perhaps your crew will have the resources and endurance to do a full week. If so -- my hats of to you'all. Might want to build up to it. . .
Charitable Venture: One model that I have seen, especially as a team is learning how to develop in this boot camp model is to take on a charitable venture. Someone's youth group? Their walk-a-thon? their church? Perhaps you post a list of options on your website and allow your clients to vote which one you will choose?
Fun Project: Our team all had tiny little projects that we wanted to do. Tiny websites that could be done quickly. Might have revenue; might just be fun. Can't think of any better team builder than people throwing out ideas all quarter with the vote happening the Wednesday before the trip.
Component of the Whole: Rather than try to do the entire project at once. Do a significant component. Could be the launch, could be the close. Our team really liked the satisfaction that came from going live on Sunday -- so my personal preference would be the close.
Last, but not least, I strongly support that a change of scenery and location be bundled with fun to make the time an adventure. Get people out of their normal patterns or you will always be competing with the normal grind. The team I did this went to Vegas and we maintained a strict work hard play hard regime which was well appreciated by all. (Well, maybe not spouses . . . but that's a different story)