At Posterous we experienced a similar boost, but then over time it turned out that we spent enough time commuting and breaking up our days that it became a bother. It's important to have a central space where everyone can coordinate and plan, but beyond that, when you're about building product -- sometimes you just need quiet time alone to make things happen.

We switched to a 3-days-in-office, 2 days work from home schedule and that's turned out to be a big boon to productivity.