ITAR is certainly a hugely important issue--and a hugely complex one--for international teams with some US component. Yes, often times these teams have to totally cordon off some subsystems and restrict them to either all-US or none-US (to coin a phrase) subgroups.
this is another area where Google Lunar X PRIZE teams have a chance to innovate. A group like, for example, FREDNET is bound by the same laws as a traditional aerospace contractor (at least in this case), but is probably prone to develop some different solutions. I'm looking forward to learning from them, in this among so many other ways.
As a side note, on a personal level, I'd like to add my voice to the chorus of those arguing for ITAR reform. I'm a strong believer in national security, but I don't think that ITAR as currently enacted maximizes national security -- and I know it has a steep economic and technological price.