I'm sure it could be done, but I personally have only had bad experiences with it. You can use Skype with multiple people on different computers, but it can be pretty RAM-heavy if you don't have a very good computer. You'd probably need to use a program like d20Pro or the like in order to do it effectively.
In my experience, though, the entire process of doing anything (even having a conversation) is slower through skype than in person, since there may be a delay and it's difficult to hear if more than one person is talking at once, so when you're doing something as complex as D&D, expect it to take a much, much longer time.
Sure it can be done, been gaming that way for several years now.
We use Skype for the conference call. It's been solid for us - no real trouble at all. Last game I played was me in Colorado, a guy in PA, two guys in Britain, a guy in Greece, and a guy in Brazil.
Unless you play really free-form, you'll want Virtual Tabletop (VTT) software. This software handles maps, tokens, dice-rolling and a char window. There is a ton of them out there: Maptools (Free, what I use), Kloogewerks, d20Pro, Fantasy Ground, OpenRPG, TTop. Yes, they do take a little prep work on the GMs part.
If you want to test it out, there's a Google group that runs Pathfinder Society games in this way. You can join a game and test it out. Or just sit in and watch:
https://groups.google.com/forum/?fromgroups#!forum/pathfinder-society-onlin e-collective
I also run Pathfinder Society scenarios on a group of my own as well:
https://groups.google.com/forum/?fromgroups#!forum/undergroundgm
How would google hangout stack up against Skype?
One of the players of our regular group moved to a faraway city a few years ago, but still wanted to play. (Occasionally, child care issues forces one or more players to stay home and play remotely as well). We tried using various video chat services (was iChat until I switched to PC... now we use Skype), but found combat in 3.5 / PF to be problematic: even when pointing the camera at the battlemat, it was tough for the remote player to see what was going on.
When I took the GM reins last June, I decided to try using Skype for audio chat only, and MapTool as an electronic tabletop. It's actually working out pretty well.
When we have a roleplaying-heavy (or roleplaying-only session), we'll bring video chat back. Again, we normally use Skype. We've tried Google+ hangouts, but we've found that the audio to be much lower in quality and a lot choppier.
As for dice rolling: I just trust the remote players not to cheat. For that matter, I don't generally look at people's dice rolls anyway, and trust them.
I use a combination of Obsidian Portal and shared Google Docs to share information with the players.
Excuse the dumb question... but if the DM runs Skype/Maptools on a Mac but all of his PCs are on PCs - that won't be a problem, will it?
That's fine, any mix will work.
My group plays using Skype and d20pro.
Our group does the same. The campaign (LoF) has been going for almost 3 years now. There are 5 of us and we all live in different parts of the US.
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I participate in no less than three campaigns a week that have both local and online players.
Here's a at how I set my stuff up for making it happen.
I don't bother with dice rollers, if someone wants to cheat, that's the least of my worries. Besides, I only play with people of high quality and trust them.
We all use HeroLab and I have .por files on all my players (or they're in the room).
The catch to having video of everyone playing is that one person must pay for Skype Premium service that allows group video calls. It's like $8 per month billed yearly...
Cheers!
Azmyth