I'm very much with Calico Jack on this. I know lots of people like the mats, and I don't begrudge them that. Heck, I'm playing in a game that makes heavy use of them, and I'd be lying if I said I wasn't having fun. But I prefer to do without. I've never personally seen a game where--at least to some extent--the instant the mat/grid game out, people didn't start thinking in terms of squares and metagame tactics, and stop thinking (at least as much) in character. And yes, I include myself in that; it's a tendency I try to fight, but I can't seem to help it any more than anyone else.
So, when I'm running my own games, I use a mat in exactly two circumstances, and not always even then:
1) The combat is so complex and has so many participants that it's simply impossible for me to keep track otherwise. (And even then, if the party is facing a bunch of orcs who are just charging at them, there's not always a need for the mat.)
2) The environment in which the combat is taking place is very complex, such as with lots of various ledges, outcroppings, archways, or whatnot. (And even then, if the precise location of each doesn't matter, we often handle it in abstracts and Jump/Balance checks.)
Yes, we do occasionally have a break in the action where a player and DM have differing ideas of the situation. But it doesn't happen that often--and even when it does, I find it far less disruptive than square counting or "No, I'm going to move through this square, rather than that square, to avoid the AoO" every round.