I like the flexibility of being able to work at home when I need to. I didn't have to take time off when a family member was sick or I had to wait for the plumber. I also felt compelled to work longer and harder just because I felt it was a privledge to be able to work at home and did not want to be seen as a slacker - (the pajama and bunny slipper image). Maybe that's just me and a good work ethic.
There are days however, when I am in the office where barely a soul talks to me and there are days when too many people feel the need to 'chat it up'. Neither situation has done anything to allow for better communication. If the company doesn't have good policies in place for communication and sharing/collaboration, visibility for the telecommuter and they don't instill an environment that inspires its employees to do so, then it doesn't matter if you sit 10 feet or 10 miles away from me.
I think with Yahoo change is more of a case of using a hammer when a few turns of the screwdriver would have done.