The concept of Live/Work is explored through this video recently published in FastCompany under The Future of Living Where you Work and Working Where you Live. (about 10 minutes)
Most of us are living inside a box of one type or another. Within that box we design other smaller boxes (and call them bedrooms) or make decisions to take down walls to create larger inside boxes (and call them "open concept"). Then most of us go to work each day inside another very large box filled with hundreds of smaller boxes inside which many of us working inside tiny boxes - cubes/cubicles.
Why not strive to live outside of functionally and formally defined boxes and create a space that is like our bodies and designed for both work and play, depending on the time of day, the circumstances or inclinations. Not everyone has this luxury, but for the increasing number who do, this recent Fast Company article taps into that vein directly.
Smaller work/live spaces have the potential to play a large role in providing infill options for cities willing to recognize their opportunities to develop these voids. The ideal buildings already exist within many alleys, as stables and warehouses. Adaptive reuse can be very cost effective and create an attractive architectural pastiche at the rear of buildings that is eventually much more interesting than their fronts.