i have been doing this in one form or another for 18 years, and you could not make me go back to working in an office or hospital. first, you can generally schedule your own time-- imagine the freedom to go to the dentist mid-week, shop for your kid's birthday present, or take a walk every afternoon. and no weekends, holidays, or night shifts. for me, the freedom is worth more than the money, and the money ain't too bad.
the major challenge is socialization. if you're really a major socialite you might miss the chit-chat of a brick-and-mortar workplace. i don't. i found that it didn't take too long to make a lot of new work friends online, on the telephone, and with email. a fifteen minute "coffee break" chat with a buddy on the other side of the country is pretty nice, and cheaper than starbucks. when we do get together a few times a year, it's really terrific.
i also love not having to get dressed up-- saves a ton of money on shoes, nylons, and dry cleaning. :d
last, i like being able to do my work and be done with it, and not punch a clock.