Yea it def depends on the service you offer and the kind of customers you want to attract. If your customers are local then yea a home business address is fine, but if your targeting the larger client something like a virtual office in manhattan would probably help boost your image. It gives you that NYC presence that screams ligitamacy.
Because e-commerce is conducted on the internet, you could keep up with business from your cell in the retreat house on Iona if you had the way to connect. Internet businesses need a "grounding" if you will. That`s exactly the concept behind my creating the "virtual HQ" site using MSOffice. (http://www.lywalenterprises.com) It gives my etheral internet business weight--presence--reality. I do not use a "posh" Manhattan address. That seems too much like stuffing your top with gym socks. In a few words, I think this is the core of establishing legitimacy: real people. real service.
I don`t think virtual offices should be used strictly for address purposes, but they are a great alternative to having a regular office space if you just need a place to meet clients occasionally.