It depends on the person or project, I think. I personally work badly with someone over my shoulder; it somehow gets me totally out of the problem-solving/coding zone and makes me extra self-conscious. Same for writing text, actually--- some people can collaboratively write articles or books while sitting at the same computer, or live online in something like Etherpad, but when I've co-written things, it's always worked much better if I could write some bigger chunks on my own, at least on the level of paragraphs, before trading edits/etc. with my collaborator. Partly perhaps it's because I use the text-editor (in both cases) to externalize work in progress and brainstorm, often typing stuff that's clearly wrong and not the final product, before I get to rearranging/editing/fixing it, and it feels weird to have someone in real-time reading my scribbles as I'm working something out, when it's not yet intended to be anywhere close to done / ready-to-review.
On the other hand, I know other people who love people watching them code, and people who work really well writing English collaboratively too.