I frequently use Safari with the URL bar collapsed (cmd-shift-| [that last character is a pipe]) and no bookmarks bar (cmd-shift-b). I love the extra space for content and the reduced distraction. It really gives web pages the appearance of floating documents on your desktop.
I used to do that as well (mostly before switching to Safari), and I would also remove the status bar (Cmd+/ to toggle it). Cmd+L would bring the URL bar when needed. A very zen look overall.
The one thing that I missed the most in the status bar was not seeing the URL links were going to. Chrome actually has a good solution for that. (it shows on top of the page at the bottom when hovering a link)
