Yup, the best incarnation of a similar system that I know of is Ars Magica's troupe gaming style:Oh, yeah. In some systems (Shadowrun, DARK SUN, and any mercenary- or army-based RPG) work great if you allow multiple PCs, but only one PC per player at a time. The other characters are not involved in the current "mission". I enjoy that style of play, and maybe I'll adopt it in the next campaign I run (it'd fit in well with a 4e game, I think).
Every player has a wizard PC (Magus), a non-wizard pc (Companion), and any number of mercenaries/npcs (Grog/Turba). Typically only one player gets to play the magus, while the rest either plays companions or grogs. When we played adventures at our home base (Covenant), players would switch between the different roles all the time, depending on what pcs were available at a given location. This can be great fun if you can pull it off.
In D&D 2E when a player wasn't present someone else would play her pc as a secondary character. This didn't work very well, though, so in 3E pcs of players that aren't present simply fade into the background.
I'm often using DM-PCs but those are played by the DM (if/when required; generally they also just fade into the background).
I'm not fond of the army-of-henchmen concept that seems to have been the prevalent in 1E.