I've been working from home as a salaried employee for the past five and a half years. Prior to that, I worked in an office and commuted for seven years. There are pros and cons to both.
Office: The daily commute, which sucked up two to three hours of my life every day. It was definitely the worst part of my day.
Home: No commute. I spend $20 on gas every two months for short jaunts to the store, etc. The mileage on my car is ridiculously low given its age. I tend to feel less irritable, though that may have other causes.
Office: Fixed work schedule. I consider this a pro.
Home: No fixed work schedule unless you're disciplined enough to establish one (I now am). Without discipline, there is a horrible tendency to either work way too much or work not nearly enough.
Office: Rigidly separates personal life from work life (pro).
Home: No such separation exists unless you are disciplined enough to establish one (I now am). Still, days can sometimes blur together.
Office: With open-floor offices (like the one I worked in), there was always some loud conversation or other disturbance going on nearby that ruined my ability to concentrate. People walked up to me at my desk every day to ask me questions rather than send an email. Lots of unproductive meetings.
Home: Just as many distractions, but different ones (dog barking, people coming to the door, etc). However, I evolved a schedule that shifts the majority of my work time into the night/early morning hours when everything is comparatively quiet. I have far more frequent and more lengthy periods of "zoned" concentration at home than I ever did at an office A secondary benefit here is that I can plan my work around my day rather than the other way around. If I want to take five hours off in the afternoon to go drink a couple of ciders on my patio in the sun, I can do that. Or watch a football game on TV, etc. As long as I put in my eight hours, it's all good. With regard to meetings, there really aren't any other than Skype chat. I have to drive into town once every two or three months for a company meeting, typically only if we have to meet new clients face to face.
Office: Clothing is mandatory.