Probably the most successful team I ever worked on had five memberS: two busiess experts (in this case foriegn exchange traders) and three developers.
One of the experts was, in effect, the project leader, in that he was empowered to make the necessary business decisions. The executive sponsor 9to use a DSDM term)wasn't part of the team & only communicated with us via this person.
One of the developers could, I suppose, be called the team leader, ut it didn't quite happen that way.
There was a lot of pair development, but not in the sens that Extreme Programming uses "pair programming", this was very much a Direct Development project.
I'll explain a bit more: