I needed an air gap to pass inspection. I do have a single hole faucet, with the air gap over to the right side. The plumber said we could remove the air gap after the inspection (doing a "loop" with the hose) and could then fill the hole with a soap dispenser. However, I later realized that the soap dispenser would then be on the wrong side of the sink ... I wash on the left and rinse on the right ... so I ended up just leaving the air gap as-is and I bought a stainless soap dispenser that just sits on the countertop next to the faucet.

It's probably a regional thing. I don't see them anymore and I'm in a lot of newer homes. Run the dishwasher discharge hose from the disposal to the top of the sink cabinet, not the bottom.

Air gaps are still required by plumbing code in a few areas in lieu of a high loop hose. Maybe it's down to just California now. There's more on this over at the Plumbing Forum. If you have to drill one, you can also backfill that hole with an air switch for your garbage disposal if you like.

I'm in California and have had one forever. When my new counter went in, I still had my old DW. I thought that one day when I got a new DW, I'd swap out the air gap for a soap dispenser. Well, I got the new DW and decided I don't want a soap dispenser after all. I don't even notice the air gap.

I wish I didn't have to have one, but I'm also in California and I'm afraid I do.