I was able to get the phone to recognise my command from about 10 feet away, as well as close by with an episode of The Walking Dead playing at full blast on a laptop inches away. But under those conditions, the service was more prone to make mistakes. For instance, the phone misheard a request for directions to Boston as “directions to fall.”
Even in a quiet room, Google Now made a lot of mistakes responding to requests to call specific people. When I asked Google Now to “call Bob,” it offered me “Emily,” “Dave” and “Super” - for the superintendent of my apartment building, who's not named Bob.