So, I've not been advocating for the 3rd edition sneak attack feature, because I'd never really given it a chance before yesterday and today.
I found that even with a heavy points investment in move silently and hide in shadows, my thief was having a lot of trouble going into stealth mode and setting up backstabs, and even if she succeeded in gaining stealth mode, she could try one time for a backstab. After that, forget trying to get back into stealth mode for another attempt. (Yes, I know about invisibility potions and spells, but I want a pure class thief who plays like a thief, on her own skill, with no magic.)
So, when I got to the cold wight army on the third level of Dragon's Eye, she was almost out of magic artillery for her trusty shortbow, but she had the really spiffy +1 dagger with the +5 to thac0, which seemed made for sneak attacks. So, I decided to try to learn how to use it.
Good grief, it's good. My paladin and cleric can establish aggro, and the enemies start to ignore my singing skald and my thief.
Then, my thief just blithely walks around behind all the enemies and sneak attacks them one by one. With the +5 to thac0 dagger and my bard song, she almost never misses, and she often single-handedly chunks enemies that my pally and cleric haven't even gotten to.
Her kill percentage in the 4-member party (and really only three members compete for kills, since my skald spends most of the time casting magical song) skyrocketed from about 15 percent to 30 percent, just in the 3rd level of Dragon's Eye alone.
I can confirm that sneak attack can be done until you hit your target. If you miss on the first attempt(s), it will still be a sneak attack the first time you hit.
This is so awesome to me - it's like my thief can do her special thing over and over, with no need to worry about going into stealth or invisibility.
One thing I haven't been able to confirm is that a sneak attack can be done with a shortbow. Has anyone successfully executed a ranged sneak attack?