I'm not fully decided one way or the other on the Full Attack vs Standard Attack stuff, as many people have made good points in this thread and others I've read, but here's a relevant (IMO) snippet to throw into the discussion from the Hide skill entry:
3.5 SRD said:
Action: Usually none. Normally, you make a Hide check as part of movement, so it doesn’t take a separate action. However, hiding immediately after a ranged attack (see Sniping, above) is a move action.
Now, taking a step back from all this, I'm going to borrow something from Hide's opposite, the Spot skill entry:
3.5 SRD said:
Action: Varies. Every time you have a chance to spot something in a reactive manner you can make a Spot check without using an action. Trying to spot something you failed to see previously is a move action. To read lips, you must concentrate for a full minute before making a Spot check, and you can’t perform any other action (other than moving at up to half speed) during this minute.
[rambling]So here's how I think things might play out using just these parts of the rules:
1. Shadowdancer uses HiPS in some situation without being observed, like before Grok, the 18th level Orcish fighter enters the room. SD is hiding on the other side of the door to said room to "get the jump" on Grok.
2. Grok opens the door, gets a passive/reactive Spot check to notice the SD. Fails horribly.
3. SD gets a Surprise Round and attempts to hide while attacking Grok. Takes the -20 and lets say SD succeeds at both the attack with Sneak Attack damage (so Grok knows someone is nearby) and the hide (but hasn't figured out where).
4. Let's assume that SD wins initiative and therefore wants to make a Full Attack while hiding.
Here's where, as a DM, I'd have to make a ruling. The Shadowdancer is already hidden because Grok hasn't Spotted him yet. Until Grok gets a turn to "try to spot something [he] failed to see previously [with] a move action" OR SD does something to potentially blow his hiding place giving Grok a reactive check, SD is successfully hidden.
So I'm wondering, therefore, whether SD should be able to make a Full Attack while hiding,
however because of this part of the Spot rule I quoted above:
Every time you have a chance to spot something in a reactive manner you can make a Spot check without using an action.
I'd probably allow Grok a Spot check with each attack by SD to figure out where his attacker is. IMO having someone attack you from hiding with a melee weapon (otherwise we're dealing with sniping, a separate issue) is enough movement to qualify as a "chance to spot something" and therefore Grok deserves the roll, even if SD misses on the attack. As long as Grok can't figure it out (because SD won the opposed roll, even with the -20 penalty), SD continues to get Sneak Attack damage. Once Grok succeeds, he's spotted SD, he's no longer hiding, and Sneak Attack damage doesn't apply for the remainder of any of SD's attacks until he's able to successfully Hide/HiPS again.
Now, that seems like a lot of rolls, and for that reason I'm not thrilled with it, but it seems otherwise pretty fair to me. I suppose you could boil it down to a single opposed Hide/Spot roll if/when SD makes the first attack, and apply that to all the attacks, but as a Player I don't think I'd be too happy about that if I were Grok if the SD succeeded, nor as SD if the Hide failed.
The Spot rules, IMO, give Grok a shot at spotting SD with every attack, so SD is pretty much forced into making an opposed Hide check. As a DM I think it's a fair application of the Hide, HiPS & Spot rules.
Now, I'm not at all standing firm on everything there, but this is the first time I've actually tried to recreate a scene like this and that's what I came up with just now. I always appreciate feedback if I've overlooked something.[/rambling]
As to the darkvision argument: Shadows exist. Shadowdancers have a special connection to the Plane of Shadow through the shadows (other than their own) around them. Whatever anyone else sees or doesn't see is completely irrelevant to that mystical connection. That it exists for the Shadowdancer is more than enough.
Thanks.
DrSpunj