Considering how infrequently I actually interact with other people in my own physical office (especially since we are all very conscious of not breaking each other out of the 'zone') this sounds fantastic.

I have tried to motivate usage of a engineering-team internal IRC channel and spread the use of screen-sharing software, but when people are physically so close the standard response is "why don't you just go talk to him?". Makes sense until you mix in the element of "I don't want to talk to him when he is obviously concentrating." Sprinkle a touch of e-mail overload making that medium useless and you have a strange atmosphere of working in proximity with one another, but not necessarily together.