I worked at a place that had a kind of combination -- actual offices, but with 2-4 people in them. I actually loved it, but I also got along with who I was paired with. We could talk all day, play loud music we liked, and still have "privacy".
Yes, my best working experiences have been in a smallish area with space for 2-4 people. We all faced into a corner but were able to talk/collaborate easily by turning around. We also worked on the same thing so it was pretty easy to get into a groove.
