I finally sat down to understand a recent post by lullabot on Drush 3 remote capabilities. Its taken me a couple of hours to set up, but this will save me hours in drupal updates. Thank you drush project!
My hangs were on setting up the ssh key, which I omitted at first and then realized that it was a requirement for drush. The second hangup I had was to make sure my *.aliases.drushrc.php files were wrapped in <?php ?> tags. Hopefully that helps some one else.
Here's an example of one of the connections I set up with my remote host.
$aliases['mysite.com'] = array( 'uri' => 'mysite.com', 'root' => '/path/to/drupal', 'remote-host' => 'myhost.com', 'remote-user' => 'ssh_username', 'path-aliases' => array( '%drush' => '/path/to/drush/folder/on/server', // ~/drush '%drush-script' => '/path/to/drush/script/on/folder', //~/drush/drush ), );