That doesn't sound like the Fog Creek I've read about, but maybe I'm just projecting from their well-publicized salary/seniority ladder? The dribs and drabs I've read about Joel's companies suggest that they're well-run classically-organized teams with a heavy dose of _Peopleware_ thinking (which is a great book).
"Anyone with even an ounce of management skill and education knows that when you have skilled people working for you, you get out the way and let them do their thing. This isn't exactly news."
I don't know about the internal organization of the teams
We're doing it, too, at my company Funding Gates (http://fundinggates.com/jobs)