(a comment on http://thinkingandmaking.com/lightpress/entries/232 whose overactive spam protection won't let me post :-)
There seems to be some confusion agile methods are purely a developmental process. That really doesn't gel with my experiences. For example I've found the Planning Game in XP is a very rich environment for doing exploratory design work.
For me agile is just as much about design as it is about implementation. Go read the agile manifesto again
It's true that if you don't have people with design skills involved in the team then you're less likely to get a decent product out the other end - but this is true of any process.
Agile development doesn't devastate design any more than any other process. In fact, I'd say that you're slightly more likely to get things right even without input from Design (in the UX/IxD sense) folk, because you're getting feedback far more frequently and can spot problem areas.
When the developers aren't separated from the stakeholders and users by N layers of management Chinese whispers it becomes a lot easier for them to do a good job.
As for agile only working 2-4 people - there are a /whole/ bunch of people who seem to be doing pretty darn well with considerably more than that :-) It's certainly easier to get a small team up and running in an agile manner. That doesn't mean that you can't get larger projects working that way.
