In my case, I traded the city for a modest home on a beautiful lake in rural Minnesota. It also lets me be near my autistic son who attends online public school (school at home is another digression, but off topic).
Yes, there are challenges, like deciding if today is a shave day or not.
All kidding aside, working at home is tool that great companies with great employees can wield effectively to obtain excellent results and acquire talent they can't find locally. Companies, like Yahoo, that don't understand this are not great companies and probably never will be.
Long live working at home!