On occasions where I've been snowed in (very different definition, based on the amount of snow, than Steve would have) and worked all day from home I have generally accomplished a lot more that I would have at work. The obvious difference is the lack of interruption, although email and IM are seriously buzzing in a situation like that.
But I think there are are 2 disadvantages to doing this full time. Depending on the company, there is the out-of-sight, out-of-mind mentality that can adversely affect one's career. In some companies that thrive and/or are based on a telecommuting model, that is not a problem. Old-line companies do not always have a modern outlook and so employees can pay the price.
The other is separation. When the office is somewhere you drive to, it is easier to leave work at work (and home at home, for that matter). When it is only a different room, it is easy to have work frustrations spill over into home (and vice-versa), which does no one any favors.
Buy the ticket, take the ride. -- Hunter S. Thompson