Is There an Ideal Team Size?
Well, though there might not be the specific magical number, it is (or at least should be) common knowledge that small project teams typically outperform larger ones: So the general rule is to keep project teams small. You especially have to be careful with your expectations when growing a team.
From my past experience, the ideal team size for a software development project is three and five (3-5) people. If you have less than three people you have very little redundancy: If your project member is ill or on vacation you will be the only one who is working. On the other side, if you have more than five people you will experience that it gets much more complicated leading them and keeping track of the work they do.
As already emphasized above you have to especially be careful when adding new members to the team: The larger the team grows, the smaller the productivity gain will become: If you already have five or more team members you must not expect more than a 30% productivity increase. Instead, you should think about splitting your project into two sub projects (the old "divide and conquer" principle).
I was always a fan of small development teams, because you can directly manage and motivate them and it is much easier to get them to identify themselves with the project goals than it is with a larger team.
The reason why I am writing this today is that I just finished reading "The Google Story" by David A. Vise (BTW, an excellent book) and it reminded me of the topic, because it mentioned that Larry Page and Sergey Brin are also fans of small development teams and that most projects in the "Googleplex" are implemented using team sizes of 3-5 developers. Given Google's rate of introducing new, high quality products I think this is another proof that for software development projects, small teams simply work best.