Depends on team & personalities. It's great for creating non-silo'd teams but bad when people aren't don't have personality type needed to get things done when required, i.e. easily distracted types. In group dev scenarios, where big projects consists if multiple team mates then it works well.
All in all i prefer it.. when i want to concentrate i will either put headphones on or just plainly say i need to get something done. no hassles.. so not sure why people complain. The whole people watching over shoulder thing = meh.. you learn to not care too much, besides it work so u shouldn't be doing something you don't want others not to see..
Where i do find Open Offices awkward is for 1. Calls will managers, 2. Appraisals of individuals, 3. Anything related to personal, team performance. I think this is something many managers overlook and assume everyone is just ok with it at their desk.. for me though, if i know i'm getting a call or want to make a call i do so in one of the quiet/call rooms alebit i have a desk phone. But yah.. privacy for these things is a concern..
PS. I don;t agree with management sitting along with team unless there is minimal calls at his desk especially regarding team.