This is all from personal experience:
positive:
can drink beer in your underwear while working
you don't need to shower first thing in the AM
no commuting means less stress when you start working
you can work during any hours (see beer comment above) so you're not forced to do a 9-5.
negative:
it's harder to convey details of implementations and requirements.
harder to keep track of time spent on projects
can't always get a hold of someone you may have a question for
no peers are available
household distractions interfere with work