I've been working from home for about two and a half years now, and it's been great.
My employer, Haplo, is on the far side of London. It's not that difficult to get to, but it is almost a 3 hour trip (especially once you've allowed for the erratic bus "service" to Cambridge station). Fine for occasional visits, not something I can see being viable for a daily commute, so I go down to see everyone once a month or so.
As a systems administrator, my primary responsibility is to the servers running our products. They're hosted in datacenters, so there's no difference between my being at home (or anywhere else) or in the office - I'm always remote.
I'm also part time, and don't punch a clock. There's huge thanks to Ben for allowing this flexibility, but it benefits us both - I can fit work in around my other needs, but can also take advantage of my free time to do my work outside of normal working hours, minimising any disruption to our customers.
Working from home requires discipline, of course, and isn't for everyone. But it would take a lot to persuade me back to a full-time fixed-hours office job.
I have a routine to get the day off to a flying start. We're up early, just after 6 most days. (This actually started when Hannah was home and was getting up for the early shift at Tesco's, but we've continued with it as it fits in quite well.) Breakfast, check email and go through my iPad games to allow my breakfast to go down, then off to the gym for a swim and shower. It's good for me, and provides a fixed foundation for the rest of the day.
Lunch tends to be pretty early, 12 noon. Partly because breakfast is so early, but we also tend to have an early dinner as well.
I try to eat well (lunch usually involves a bit of meat, salad, pickles), and drink mostly water - left to my own devices I would be permanently drinking coffee, which isn't such a good thing.
I've mentioned a couple of things that are important about working from home already - establishing a routine, and having discipline to avoid bad habits. I'm not slumming around in my pyjamas either - although I do avoid proper shirts, tending to usually wear a T-shirt (I have a large collection, from vendors, trade shows, and conferences).
I'm naturally a solitary person, who would happily sit in front of a computer all day and never talk to anyone. We do keep in touch throughout the day - we're rather old school, IRC being the tool of choice.
One thing I do try and do is get out of the house. Going to the gym is part of it, but there's so much more to do as well. Cambridge has lots of museums, so I'll occasionally be out at places like the Whipple or the Fitzwilliam Museum. The Fitz is great because it's free, which means you can nip in for lots of half an hour sessions and just do one gallery at a time, rather than making a major expedition out of it. There are lots of other departmental museums well worth a visit, and a rotating exhibition at the UL.
Recently, I've also managed to get along to some of the talks that are part of the Cambridge Festival of Ideas.
I try to go to a lot of technical events through Meetup too. This tends to vary a bit, one of the annoying things is that clashes seem to be rife - seemingly far more than you might expect by chance. One of my original plans was to go to the office on the days there was an evening meetup in London (which also included the monthly LOSUG meeting before that folded), but that doesn't seem to be anything like as often as I originally anticipated.
A recent thing is the Cambridge Remote Workers meetup group. It's just an excuse to get out and socialize and network, but it's also important that it's a different set of people from wider backgrounds than is normally present at the rather narrow tech meetups I otherwsie go to.
I've started to be more active in other areas - a bit of campaigning with Smarter Cambridge Transport, looking at getting involved with the Foundation Trust at Addenbrookes. That's when I'm not supping on a tasty porter at a local beer festival, of course.