I've been playing music online since 2005, in SecondLife and through other live streaming channels.
I love playing with a live rhythm section but it's not possible to do so from my shoe box home studio. There's a number of reasons for this: operational, logistical, and financial.
It's possible to use backing tracks (they're great for training) but I don't like them for performing because of their static nature. It's like playing on railroad tracks, which makes it difficult if you're more the jam band style that I am.
Loops are slightly better, especially with DAW's like Ableton Live, because you can vary them manually or programmatically (with follow actions) but they generally are static (though it's possible to humanize them a little on repeat plays to vary them slightly).
So I put together a system of plugins running in Ableton Live that are part AI controlled, part manually controlled by a launchpad midi controller, and most importantly controlled by the dynamics of my playing. This lets me cut loose with bass, drums, and piano/keyboards and have a lot more fun.
The result is an interactive reactive rhythm section that responds to my playing dynamics - dynamics being a key part of musical expression (apart from a few notable genres that thrash it full out nonstop!).
It's taken a lot of fine tuning to get it to this point, and there's a few tricks to getting even close to sound "human" (otherwise I'd stick to Techno;-). It's been through a lot of iterations, and it's given me a lot of ideas for augmented playing systems to expand a solo or duo's live capability beyond relying on backing tracks or loop switching.
I've also used this system as rhythm backing for doing networked live music with musicians located in other countries, playing live at the same time using Ninjam.