How Does Radical Collocation Help a Team Succeed?

Many companies are being challenged by whether or not to colocate teams, and how far to go: in the same room, same floor in the same building, same geographical location. The argument is that there is success with distributed teams, in Agile, so is it really worth the extra effort to move people? This is a published industry report on the benefits of colocation and what teams could take from this to be successful if working remotely.