I'm currently playing a TWF Rogue, and am looking to take a level in Shadowdancer for the HiPS ability. My line of thinking is I could sneak attack an enemy and use HiPS to effectively disappear afterward (I know one must be within 10' of a shadow or dim light to use HiPS), then be able to make another sneak attack next round.
Is this possible?
RAW and RAI say yes, you can sneak attack from stealth after having used Hide in Plain Site (assuming your HiPS attempt succeeds, the target is subject to sneak attack, etc.):
As long as she is within 10 feet of an area of dim light, a shadowdancer can hide herself from view in the open without anything to actually hide behind.
Your Stealth check is opposed by the Perception check of anyone who might notice you. Creatures that fail to beat your Stealth check are not aware of you...
The rogue's attack deals extra damage anytime her target would be denied a Dexterity bonus to AC...
Sometimes you can't use your Dexterity bonus (if you have one). If you can't react to a blow, you can't use your Dexterity bonus to AC. If you don't have a Dexterity bonus, your AC does not change.
Creatures are denied their Dexterity bonus to AC "if they cannot react to a blow" (CR pg 179 under AC). It was our intent that if you are unaware of a threat, you cannot react to a blow. I think we probably should have spelled this out a wee bit clearer, but space in the Stealth description was extraordinarily tight and ever [sic] word was at a premium.
-- Jason Bulmahn, Lead Designer
So, if your opponent is unaware of you, they're unable to react to a blow. Hence, they're denied their Dex bonus. Hence, Sneak Attack.
Stealth suggests that you'd need a move action to hide again after attacking (or take an impressive -20 penalty on the Stealth check), but sneak attacking once per round seems imminently do-able (assuming the stealth rolls land in your favor).
