Yes, you definitely need a place that you can *focus* on your code. This does not have to be a neccesarily "quite" place, as most seem to do well on some sort of white noise (be it a brewpub or a pair of headphones and an MP3 collection). I highly recommend the book Rapid Development which spends a chapter talking about the need for developers in particular to have their own uninterrupted time, as we tend to "focus in" for long period of times, and do not deal well with constant interruptions. (I'd quote from the book, but it's currently loaned out).

Working in a cubicle is the worst, especially when co-workers have conversations with other co-workers in a nearby cube. Plus, the phone, the traffic, the constant questions, etc. Even headphones don't really help, as human voices (especially louder ones) are very hard to filter out short of the reverse phase trick mentioned above. If anyone else has the aforementioned book, I think there were some actual scientific studies quoted in it that would be of particular interest to this thread.