Having hired developers both with a degree and without a degree, I'd say largely those without a degree are better programmers, but I believe it's because they're more open to out-of-the-book thinking. I have hired some very good degreed programmers, too, but as one new grad told me six months into the job: "I've learned more in the last six months than in four years of college."
I may be biased, though. I am self-taught and don't have a degree. I couldn't see paying $40,000 for a piece of paper that says I know what I already knew.
Looking back, though, I wish I had gotten my degree at some point along the way, though.