If you don't already have a current-generation computer (500-MHz processor or better, with at least 128 Mbytes of memory) at home, you should purchase one, or get your employer to buy one for you. Don't try to telecommute with your old 133-MHz Pentium. It just won't allow you to do the compute-intensive tasks required by your job. You can buy a highly capable new computer in the $1500 to $2000 range.
Today, high-speed Internet access is almost a prerequisite for working out of your home. You should be able to access network and Internet information resources just as easily as you would from the office, and your connection should be as permanent as possible. If you can get a dedicated high-speed Internet link, make sure that you can use it seamlessly from your computer without manually connecting lines or turning on equipment.
Many alternatives for high-speed Internet access exist, including Integrated Services Digital Network (ISDN), Digital Subscriber Line (DSL), broadband cable modem, and satellite downlink. But none offer complete satisfaction. ISDN, DSL, and cable modem aren't available everywhere. I can't get DSL or cable modem right now, for example. ISDN has a highly complex setup and rate structure, and satellite solutions still require a telephone modem for the uplink. Thoroughly investigate all alternatives, and carefully choose the one that best suits your purposes.
Dial-up connections to a company modem pool is the wrong way to go for network access. This solution is primarily designed for the short-term connections of users traveling on business. It's often slow and congested. Talk to your company's network managers about setting up virtual private network (VPN) access through the corporate firewall. This is a straightforward and well-established technical adjustment for both them and you, and it allows you to come into the company's network through a secure Internet link.
How you set up your work environment at home has a great deal to do with your family situation, personal preferences, the layout of your residence, and the type of equipment that you need. In general, you should have a permanent computer desk, a fixed computer setup, a workbench with other necessary engineering equipment, a dedicated work telephone line (or telecommunications or videoconference software integrated with your computer), and ready access to standard office supplies.
Experts usually recommend using a separate room that's closed off from the rest of your home life. This is good if any family members are home during the day. But one of the conveniences of working at home is the flexibility that it grants you to fulfill your personal as well as professional commitments. You might take a break in the afternoon to pick up your children from school, but work after dinner to compensate. Therefore, instead of employing hard and fast rules, I recommend looking at your personal situation to determine how you will carve a full work effort out of your day.
I have found it useful to structure my work so that it's deadline-driven, rather than process-driven. I'm more likely to complete a task most efficiently if I'm working toward a deadline and don't waste time engaged in domestic activities. If your work doesn't naturally lend itself to deadlines, you might find it useful to create artificial deadlines and reward yourself for meeting them.
One remaining concern is your work hours. When working at home, you will probably tend to either not work enough hours, or else work too many hours. There may be too many distractions at home for you to work effectively. In that case, personal activities could start crowding out your work responsibilities. On the other hand, you might find yourself working many more hours than you would in an office, if you have too few distractions.
Neither situation is good. That's why you should establish a work schedule before you begin telecommuting. If you see yourself deviating from that schedule, examine why and what you can do to get back on it. That's the whole purpose of telecommuting, after all. If you don't make it work, no one will do it for you.