Jamulus is nice: http://llcon.sourceforge.net/
Yes, there is latency over the internet, but IMO you can get used to it.
So, I have never tried it, but with Reaper you should be able to jam online with other musican with this.
Not going to work, latency will be greater than 10ms which is too much for musical timing and coordination
I also thought about this and it's a hard problem. It would basically have to work like a real-time game engine where user actions/inactions are predicted; those sounds get sent to everyone; everyone hears the result; some people can change their inputs; sound gets corrected with inputs.
The resulting sound will be glitchy as in notes that were not played will briefly be heard--similar to how a character position might glitch in an MMO. Anything without predictive sound broadcast wouldn't have the timing to be fun to play together is basically my conclusion. I would love to see this, as glitchy as it might be would still be awesome. Maybe something that uses both TCP and UDP might help. UDP to get early input changes, and TCP to always eventually catch changes.