I've worked in an open-plan office for the last 6 1/2 years, and I'd never go back to cubes, or even to private offices. The level of collaboration and knowledge-sharing is much, much higher, and while the level of distraction and ambient noise is higher, I find that the increased communication is so valuable that the increased distraction level is more than worth the tradeoff.

From the responses here, I'm guessing not a lot of people on this board have tried XP or any other programming methodology that thrives on high-bandwidth communication. There are plenty of other development methodologies that work for people, of course, but XP and anything close to it really requires a constant level of communication betweeen developers, product managers (and customers), and testers that's just impossible to achieve if you're not physically sitting right next to everyone. In the worst case, maybe the distractions mean I only get 6 hours of work done in an 8 hour day, but it's the right 6 hours of stuff, which isn't always the case when I can't constantly talk with everyone else.

It's certainly possible that people have tried XP with pair programming, story cards, etc. and just hate it, but my experience with new hires is that there's often a lot of initial hostility to the open seating plan, but after a few months most people figure out how to deal with the distractions (generally via headphones or even earplugs if necessary) while coming to appreciate the benefits of a high level of cross-team communication.