I always play with my eyes closed, or looking up at the ceiling or off to the side away from the guitar. I find it distracting to look at the guitar or the fret board while playing because it interupts my "flow". You develop an instintive "feel" for the string placements and fret board positions. (I've also spent a considerable amount of time during practise in training myself to keep my mouth closed -avoiding the "catching flies" look) and to not going through facial contortions or gyrations when playing difficult string runs or passages. (You not only want to sound good, you want to look good too.)