Having interviewed quite a few people, I tend to think that there's a correlation between not just a degree, but also the quality of the school where it was attained, and the quality of the candidate - as measured by his/her professional knowledge and ability.
That's not always true. In fact, of the two best coders I know, one didn't bother with a degree, and the other did it as an off hand, graduating after 8 years, having worked full time all along.
Nevertheless, when it comes to people I don't know, and given that I don't have the time to interview everyone who sends their resume, a degree serves as an initial filter. If the resume is impressive enough without it, then I'll go ahead and interview, but it has to be really impressive.
In short, not having a degree is an impediment. You can succeed without it, but you're putting yourself at a disadvantage.
If a position stated that a degree is a "nice to have, or advantage" I would certainly still send my CV and hope that it was glowing enough to counter my lack of degree, which I would hope it is through sheer commercial experience gained while everyone else was in education.
But my gripe is that most employers don't even give us that chance.
In a way, that has played its part in my working life that has sent me on a path to be independent and start my own company, so I guess its not all bad :)
Smaller companies where productivity is measured more closely don't care that much. Big, dumb bureaucracies tend to hire based on buzzword counts on resumes and GPAs. You don't want to work at those places anyway.
Part of me wonders what would happen if you just faked some school on the paper. It worked wonders for the dean at MIT, so if you are smart enough give it a try.
