I have been working remotely from Malaysia for a US company for the last 3 years. Previously I worked for them in the London office, although I was the only developer there.
The main personal benefit is being able to control my environment completely. I can have complete silence, loud music, standing desk, sofa. Of course I also spend zero time commuting, so when I finish work I don't have to waste hours of my life stuck in traffic. My work often benefits from this, as there is nobody distracting me (Skype and Email are easily ignored) and I can really get in "the zone" as they say.
The downside is that interaction with colleagues is limited and usually for a purpose (e.g. can you help with this, can you do that) rather than more informal/spontaneous which can result in some great ideas or hours saved (e.g. oh, try it this way). It's also fun to work with others at times.
Overall I am not sure if I have a preference for either. Ideally I would like to flexibly be able to be in an office amongst colleagues, or working remotely. Depending on my mood and what project I am working on.
Sadly being in Malaysia makes this tricky as it's a long way to commute to the US (and very difficult to get a visa!).