I have been telecommuting on a contract. Its not a panacea, but then I'm married with children including a newborn. If I had a separate sound proof office with a lock I might be able to make it work. But with Dad home, its easy for that to be taken advantage of. I'd be more productive in the office as the most hours I've put in are 31 in one week.
Its definitely not for everyone. If you single, its probably VERY profitable. Overall I'm for it. Most of us hacks have the integrity to make it work and be honest about it. I am seeing issue already though. 1) Source control is getting to be an issue. 2) Time management is also an issue - depends on family/self priorities. 3) Access to resources: telecommuters have less access to funding, hardware and tools. Typical issues anywhere but far more in remote sites.
Good luck to all telecommuters!!!