I've worked at Pivotal Labs' office in San Francisco and done pair programming at a few companies now.

When you're pair programming, you're not wearing headphones and "getting into the zone". You're openly collaborating, sharing thoughts, bouncing ideas, prototyping things on a whiteboard, and so on. Just like at a party, you subconsciously filter out the surrounding noise when you're talking to your pairing partner. An open office is perfectly fine for this. I didn't think it would be a good situation at first, either. :)

However, I personally do not enjoy pair programming. There's a few reasons why, but the big one is that it's mentally exhausting. Eight hours of engaging in conversation completely wipes me out even if it results in amazing code. I couldn't deal with it any more. To a lesser degree, I do not get the same sense of accomplishment from completing tasks when pair programming that I do from completing tasks by myself.

That said, if I ever run a company with a handful of programmers or more, I'm going to hire engineers who like pair programming.