Internet office culture continues to encourage freedom, though new rules are emerging.

Xeno is spending a flawless summer afternoon tied to his desk at Ninth House Network, a San Francisco startup where long days are the norm. Still, he's comfortably reclined, munching on a snack and toying with the idea of taking a walk later. He's certainly had worse days - like when he swallowed a tennis ball and vomited in a vice president's office.

The VP has since left, but Xeno, a 100-pound Bernese mountain dog, still has a secure place at Ninth House.

Rather than the hackneyed Foosball table, it seems dogs - the embodiment of personal freedom and creature comforts - have become a more apt symbol of the human-friendly new-economy workplace. In The Standard's survey of Net workers, among a variety of employee benefits and perks, dog-friendly policies are one of the top predictors of worker satisfaction.

While our survey showed that only 8 percent of dotcoms let dogs have their day, more than just canines have made an appearance in the workplace. Notions of what makes a progressive office culture - including a blurring of work and life, nonconformity and minimal hierarchy -- continue to move through startups with the speed of a rabid stray.

But while the downside of BMW signing bonuses, weekly massages and lavish launch parties became apparent when startups failed to make money overnight [see "Is the Free Lunch Over?" page 238], the recognition of workers' individuality has grown lasting roots in startup culture -- without completely sacrificing business. Employees are still encouraged to break rules to aid creative thinking, to think outside the cubicle, to rub elbows (and even butt heads) with executives, and, taking a hint from man's best friend, to walk away from their desks once in a while.

When at their desks, however, Net workers want work to be the focus. A senior producer at a 3-year-old portal, who asked that her name not be used, says the forced levity of working in a "nonstop party atmosphere" became almost as tyrannical as old-economy rules about wearing a tie and calling your boss "sir".

As companies face downsizing, some old-economy values are making a comeback. "We want vision from the CEO," the producer says. "Tell us our jobs will still be here and that our stock is going to get back above $20." When her company moved its San Francisco headquarters in May, no space was made for the ping-pong or pool tables. A month later, happy hours were canceled for "liability" reasons.

Yet in a tight job market, Net firms must make the intangibles of the work environment count -- especially since instant wealth through stock options has become a more distant dream. One e-commerce business development director says of the lackluster IPO market: "The party's over. I just want to work where I will be happy."

Employees demanding happiness may seem a bit like the tail wagging the dog to old-school managers, but recognizing individual needs is now essential to keeping talented employees. In the full-employment economy, startup culture has taught even conventional firms that those that keep the best brains often win.

Within office walls, this means paintball is out and a culture that nurtures the "whole person" is in. Once a conference room considered too small to be of use, a nondescript room at Ninth House is now an incense-filled, candle-lit refuge. Call it holistic HR.

Though the Zen room sounds flaky, it signals a cultural shift toward creative thinking and the idea that employees who get out of their cubicles more often can be more productive. But Net workers don't necessarily need to go on a company-sponsored rock-climbing trip. Something like the Zen room can be a simple, cheap way of breaking corporate monotony and giving the company "soul."

"In this economy, where you are forced to pay people a premium, shame on you if you can't provide an environment that gets the most out of your people," says Mark Goldstein, CEO of BlueLight.com, the San Francisco based online arm of buttoned-down Kmart.

Although influenced by a stint at Apple Computer, Goldstein says he didn't set out to mimic Silicon Valley culture; instead, he aims to celebrate individualism and help employees "actualize" who they are. He's helping stodgy Kmart find its soul, too. In August, the company's Troy, Mich., headquarters abandoned the coat-and-tie look for business casual.

As the soul has grown in importance, so has the body. Interwoven, a Fremont, Calif.-based software company, took the spotlight when it offered a three-year lease on a BMW Z3 to new employees. But few new hires took the car (they grabbed the equivalent in cash instead), so HR director Gary Wimp decided to look inward. When he hired a world-class triathlete to coach employees on exercise and nutrition, Wimp wasn't just trying to be trendy. Healthy employees feel better about themselves and also don't take time off for minor illnesses.

The same can be said for regular feedings (that is, free food) at the nouveau workplace. Catered meals and company kitchens regularly stocked by Webvan don't just fuel employees and keep them in the office; they let CEOs and interns rub elbows over plates of pad thai.