Walking around with earplugs/headphones all day is too painful and not an option, so now if I really want to get anything done I leave the house.
As far as home working is concerned, I do it (along with slightly different hours) during term time to allow me to do drop-off/pick-ups. There's no-one else at home when I'm working from home.
During holidays I'm either off to look after children or I work from the office. I don't have enough space to effectively shut myself off.
(Our flat has three bedrooms ... or rather, had three bedrooms: in practice, it has one bedroom and two offices.)
The downside is that it can definitely blur the lines between work and play. I can live with that, however, because it does offer me a pretty significant amount of freedom with my time (that is, I'm willing to work a couple of hours later in the evening if I'm free to take advantage of a perfect spring day in the afternoon).
[0] This actually helps enforce a schedule because I am relegated to my desk in the bedroom during school hours. I can only show my face during lunch.
"He lives ... with his wife..., a couple of cats, several thousand books, and an ever-changing herd of obsolescent computers."