Communication problems are definitely issues online, especially when it comes to sarcasm/jokes. And yes, people do tend to be more honest online. There is definitely something easier about admitting something to people you've never met than to someone you know personally. I don't share my writing with people in 'real' life, but I don't mind posting it on the internet. It's that one step of removal from personal dealings that changes the dynamic so much. For me, however, I'm much less likely to be blunt with my comments online, because there is no opportunity to explain myself in the same way. For that same reason, I am much more comfortable raising delicate issues in person, because I can minimize the risk of misunderstandings between myself and the other person.
All in all, I find online communication to be useful and effective, except when it comes to sensitive issues and sarcasm, where, as BSK mentioned, the context of a remark is sometimes ambiguous.
PS
Since when does F**k have 5 letters?