No, I'm not saying you should wear a pant suit while working from your living room. But please - change out of your pajamas, will you? For me, just knowing that I look decent makes me much more likely to take my work day seriously. Unless I have a meeting where I have to look professional, my favorite wardrobe for working from home is exercise clothes. They're comfortable, presentable, and automatically give the feeling of accomplishment. It's also a motivating factor to exercise, but we'll save that for another post.
You know the ones--you can never please them, something is always wrong, you haven't followed their instructions to the letter. You forgot to cross a "t" or dot the "i." You dread their phone calls and e-mails. Your staff cringes when they have to interact with them. The air gets sucked out of the room when they are around. Not a good situation, and you know it.