My friend bought the largest 110volt air compressor that sears sells, and I was somewhat disappointed with its ability to run air sanders and the like. It was not capable of operating them continuously and required regular breaks to refill the tank.
We have a 220 volt one at my family's garage that can operate just about anything I've ever ran on it continuously, and its reasonably quiet.
I think the hot set up is the outdoor 220 compressor so the noise stays outside, with plumbing going inside. I've also seen some garages with a "closet" with cork lined walls to quiet down the compressor, and a ventilation fan going to the outside to keep the compressor cool.
For me, I don't do much with air tools at my house, so I just use 18 volt cordless tools for all my needs. Its so much simpler than getting out the air hoses and chucks and oiling the impact and the compressor.
Oh, and on the subject of oil- make sure you buy a compressor that requires you to oil it. the "oilless" ones are WAY louder (and a lot of people say they don't last as long).
When I finally get my own garage I'm not gonna waste my time on a 110 volt compressor. 220 or nothing, IMO.