We have been pair programming at my company for about two years now. Our take on this is that pair programming is the norm. All activities are assigned to pairs and we usually start out using pair programming but might split up if appropriate as the activity progress.

Since a couple of weeks our team has faced a new challenge. We are now a geographical distributed team. The main team resides in Linköping but we now also have one team member in Stockholm and one in Sundsvall. I honestly thought that we now would have to give up pair programming but it seems that this XP practice works fine even when the pair is separated by 500 km. The tools we use is simply VNC and Skype. I haven't tested myself yet but the pairs that have seems to think that it works just fine.