My rule of thumb is that even a dog knows not to shit where he eats; I've never allowed myself the temptation of someone with whom I work directly. I've seen it occur and have yet to see it end well.
On the other hand, when I was 24 I worked for a medium-sized chain of furniture stores. There was a girl in customer service out at the warehouse who got me out of some terrible scrapes, and we started flirting over the phone in a casual way. She knew I was basically gay (I think she was probably at least very bi-curious), and in between our flirting I'd occasionally share a tale of some recent sexual adventure. We both considered it completely harmless.
That summer we both went on the company-sponsored booze cruise around Boston Harbor, where flirting turned to some dancing which led to some groping. She came home with me that night and we had some drunken play. It was completely NSA: really more about curiosity than anything else.
It didn't hurt our working relationship one bit, though we kept it pretty much a secret. I've always thought of it as the reverse of a straight guy experimenting with a dude after a few too many cocktails.
The postscript is that later that same year, at the corporate Holiday Party/awards ceremony she very publicly gifted me with a large silver and green-glass brooch, which I pinned to my dinner jacket immediately. We both thought it was a hoot (and a lovely gesture), but many of my co-workers at the store were slightly horrified to see me wear such a large and ostentatious piece of (rather feminine) jewelry. I wore it to every other such function as long as I worked there. It's still in a box in my bedroom.