Using distributed version control means that everyone has a local repository that interact with others', so anyone can be a server and a client. In more concrete words, you do not need to connect to a server to commit, committing is personal, and until you are sure you have the final version you then share your changes, but along the way versioning was helpful to you and not intrusive to everyone else, in a centralized system you would have to pollute everyone's code to achieve that convenience, but with a distributed system you no longer face the "to commit or not to commit" dilema.
Also, the distributed nature of these systems allow to handle conflicts more intelligently and adapt to more complex workflows without hassle, and with hosting services such as bitbucket.org, github.com and launchpad.net, everyone has acces and everyone can exchange code in any direction, even without needing to create patches.
The typical setup of a centralized system such as CVS and Subversion involve a server with a repository and users as clients that push and pull the changes remotely. Everyone must be in tone with the same repository at the same time, if they want to commit.
In a DVCS setup there is often also a server that has a central repository where everyone pushes changes, however this time, each one of the clients has its own local repository (to which they commit their changes), so they only need to connect to the central repository when feeling like sharing the changes. Now commits and updates happen locally, and repository synchronization through push/pull is the only thing one needs to be connected for.
But because anyone with a repository can also act as server in a distributed model like this, peers can push/pull between themselves, and this allows people to cluster in teams and then integrate their changes with other teams. The following diagram denotes what would happen in a LAN/VPN environment using a DVCS, when each person opens up their local repository.
There is no need for commit access, one commits locally and authorization only happens when writing to or reading from other repositories. IDE and graphical integrations for this tools are mature and widely available.
The Joomla! community can benefit from this kind of tools because collaboration turns out to be more accessible, fluent and open. This way Joomla! can get more contributors and be more visible to developers through services like github and bitbucket.
After laying out in the previous section the kinds of setups there can be, the following diagram shows what actually happens in real life: