I was at a conference recently where Sven Peters from Atlassian held a presentation on the subject "7 things that make good teams great", presentation available here. One of the advices related to this topic.
What they did was to create a "Do not disturb" time. The idea was to set aside a certain time, like 14:00 - 17:00 where no interruptions where allowed. Phones were turned off, email clients were shut down and a "Do not disturb" sign was hung in the hall/door.
If a question came up that needed discussion, they took it to a separate room.
This allowed them the advantages of a team sitting together in the same room, but at the same time they got a chance to get into that important workflow.
Update and edit with regards to the bounty:
The answers here cover partial solutions, some speculative. [...] I am again in this situation and some of the
noise comes from neighbors (so "do not disturb" has limitations); I would like
to see a detailed canonical answer that evaluates a variety of approaches.
I'm afraid the options are limited and the limitations depends on your physical work environment and what the company you work for are willing to do.
I'd say the solutions I've seen are a combination of these:
Get everyone who wants it their own office.
This usually isn't feasible at all due to the space it requires.
Put people who must talk a lot (sales, marketing, support, bosses,...) in their own office.
This is pretty standard, but leaves those who sometimes need to talk at their desk stuck in an open office disturbing those who require a quiet work environment.
Place those who are easily disturbed in their own office.
Very difficult to handle since it will result in jealousy. Also requires that there are enough separate offices for all those who want them.
Accept that sometimes you will be disturbed and resort to minimizing the noise.
I'd say this is the usual scenario. Those who find any noise a distraction are given headphones, earplugs or other ways to reduce the distraction. Not optimal at all.
Discuss with others who share the open office regarding how to handle noise.
Set up rules that all agree on. Such as; phones always on vibrate, leave the room before answering phones, no discussions in the room at all. If you all agree on what is allowed and not, it will be easier to follow them. This could evolve into have different open office room. One for those who are very easily disturbed and another one for those who don't aren't as bothered.
Find a different company that has a different office environment and prioritizes differently.
If you are looking for a "silver bullet" that will solve all issues I think you will be disappointed. I think that the best you will find are alternative 2, 5 and 4. If that isn't enough you will need to consider 6.
There are several ambient noise generators, such as noisli that create a background noise which may help you focus.