During lunch, I was reading an article on Boston.com about how to tactfully tell a co-worker that (s)he stinks. A few years ago, one of my friends in another department used to complain that his cubicle neighber smelled like warm garbage, but I can't think of an instance where lack of personal hygiene has been an issue.
In my experience, it's been the opposite. I worked in a call center for almost 2.5 years after college, and there were about 20 of us housed in one room. We each had our own desk and surrounding area that was sectioned off to create an illusion of personal space; however, no one had any privacy, as the wall partitions only rose about an inch or 2 above our desks. One of my co-workers used to take off his shoes and socks during calls (we had headsets, of course) and clip his toe nails neatly into his trashcan . Another co-worker used to keep a small mirror and tweezers at his desk and pluck his nose hairs. Much to everyone else's amusement, these habits were addressed in a (bolded) bullet point during a staff meeting that warned us "grooming" at our desks was prohibited.
During my final semester at library school, the guy who sat next to me would floss his teeth during the lecture. I eventually ended up moving my seat instead of telling the guy to take care of his gums during the break, because I couldn't wrap my head around the idea that a grown man thought it was appropriate to floss in a classroom. Too bad there was no bolded bullet point to nip that gross habit in the bud.