My experience has been that "non-billable activities", within reason, tend to improve work qualitiy and thus are to the benefit, rather than the detriment, of the company.
I drink just far too much coffee at work. I tend to do this more because I need to take a break from my desk where I've got too close to the coal face, I need a chance to step back and gain a wider perspective, than because I'm that desperate for caffiene. Similarly, I tend to do my best design work while in the shower or driving down the freeway.
I don't think anyone performs particularly well at work when they're worried about their sick child but can't call home to check on them (or when they're dying to go to the restroom, for that matter).
Which isn't to say I don't entirely agree with this:
Groups will always work better when their members are pulling in the same diredtion and not trying to rip each other off.
K
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