It is rare, but it does happen. Over the last 4 years I've help to build up a 10 person development team (from 3) having never met any of the candidates before hiring them.
I didn't meet anyone else from the company until a year after I had already been working here.
The interview process is just needs to be fairly rigorous. Our preference is to hire within Canada because of:
* Timezones * Government incentives * Payment/Tax/Accounting hassles have already been sorted
But that doesn't mean we'll pass up great candidates in other locations.
We're hiring Modern Perl developers right now :