I'm a student and I live in an apartment near the University of Texas campus, working just a few feet from my bed. Freelancing to pay the bills, and my start-up stuff to exhaust whatever surplus I have, which is--thankfully--a lot more lately thanks to my new niche. Noise is high (especially Thursday through Saturday nights due to parties) but I like having noise going on most of the time. If I want some quiet, I can just wake up earlier.

Rent is high, but I see it as an opportunity to find a great way to work that will provide even more surplus/tangible income when I move to somewhere cheaper after school.

I focus on speed of production and finding several small gigs a day. As a designer, it's a lot easier than being a programmer in this regard; lately demand has been at $400 a day but I am only willing to supply $200-300. I don't keep a backlog either, so my rates still have room to grow. This lets me cover my bills and still keep my main focus on my startup (an iPhone app currently, but I have several projects in line, such as http://www.epictee.com).

Here's my setup. My bed is immediately behind my chair: http://i40.tinypic.com/e69085.jpg