For me, I've estimatee that in each work day, on average, I "waste" about one hour on non work-related activities (such as phone, lunch, internet, newspaper, etc.). But, I still do put in a "full day." I'm usually on-site for 9-12 hours, almost always bring work home to do after the kids go to bed, and bring home hours worth of work for the weekends. 55-70 hour weeks are the norm.
On most workplace related topics, I've always believed in the trickledown principle. In this case, modeling good work ethics for my employees is critical. That's part of the reason I'm the first to arrive and the last to leave, along with keeping these "personal" tasks to a bare minimum. But, I'm not perfect and don't expect perfection.
Depending on the type of work someone performs, there will always be time spent on non-work activities. I've always tried to have a good balance between maximizing the amount of work I get out of my employees while giving them enough freedom to keep them happy in their job. If my employees allow me to be a macromananger (basically them being on auto pilot, getting their work done without much intervention), I'm happy. But some require differing amounts of on-the-job "parenting"...in other words, keeping them off the internet and doing their work. What's awful are those employees who feel the internet is their "right" while on the job!
On this topic, "cyber-slacking" has to be one of my most favorite workplace-related terms.