I went through a round of hiring recently. I'm not opposed to hiring someone who is lacking a degree but those candidates face an uphill battle. I think the biggest indicators of success are someone who is curious and likes to tinker with things. He or she is constantly learning, picking up new things, is not afraid to challenge his/her own beliefs (especially on things like ways to solve problems, which technology to use, etc). I like to see candidates who have personal projects.
On the flip side of the degree question, I saw a LOT of resumes from people who had degrees (bachelors, masters, and even some PhD's) and were absolutely terrible candidates in the interview. These were almost exclusively from universities in other countries. It's difficult to not build up a bias when facing trends like that. So I try to remind myself that programmers who are currently unemployed also tend to be the crappy, unemployable programmers -- joelonsoftware.com/articles/FindingGreatDeveloper…