Joel Spolsky recently wrote a guest editorial on Inc.om. It was a good read, and I happen to agree with him on most points. One of the main points is a top developer is often 10 times more valuable than an average developer. Given me a small team of stars any day! Sometimes, even one or two stars on a larger team is all you need. The stars will be the ones that solve all the tough problems, but most of all, it is the stars that think up great solutions or save the team (and the company) valuable time. In the software biz, time is everything. Your costs are almost always related to time, and time to market is absolutely critical. One thing I would add is that the star also needs to fit with the rest of the team. Team chemistry is often mentioned in sports, but it is also very important in software development. It's a beautiful thing to watch when a great team gets together and cranks out great stuff. As a manager, often the best thing I can do is make sure no one interrupts them.
Anyway, it's a good read. I recommend it.