We have done both....separate only with a couple we know well and trust.
I (f) prefer separate room for a number of reasons. I do not especially enjoy watching my husband with the other woman. It does not, in any way at all bother me, other then I find the sounds distracting. I might be totally engulfed in my play....feeling 'drunk'....without having drank.....and then the sounds snap me right out of it.....bummer .
I also find that I can let loose and be totally myself easier when it is one on one. Not that I hold back because of my husband, but one on one is much more personal, and a makes for a smaller audience, thus makes for a wilder me. The touching and play that, as a result, doesn't occur with my own spouse, I don't miss because I have him all the time at home. Also, in regards to the couple we are with at this time...the man performs better separate room, due to the lack of distraction. So that is a huge plus for me as well.
We trust each other completely and do not feel the need to have to keep our eyes on the other. Not that all same room couples feel that need, but I think many do. The first few times we would be with a new couple, I would prefer same room just to 'see what he's getting'....and to gain trust in the other couple.