For me, the answer is yes, the work does get done. My company has a 'buddy' system in place, whereby at least two people know everything there is to know about each other's jobs, the status of projects, the priorities etc. Whenever anyone goes on vacation, we have a 'hand-over' meeting, where every person involved in the project(s), including the customer, attends a conference, the project manager briefs the group, sets target goals and deadlines for while he/she is gone, and delegates the tasks. When the project manager returns, there is a 'hand-back' meeting, and the process is reversed.
It works great. Since working for my company, I've taken four vacations, each lasting at least 10 days, and every time I get back to just a handful of 'FYI' type emails and an empty voicemail. This is good because when I go on vacation, I leave my blackberry and my laptop at home. If I worked while I was on vacation, Mrs. IFEMaster wouldn't be too happy!
Delivering Anecdotes of Dubious Relevance Since 1978