I've met a handful of people in person that I first knew or knew of online, going back 10 years. Most of them were just people to hang out with, especially back at Purdue, none were really relationships as such, though I won't deny using things like 'talk requests', e-mail and IMs to keep in touch with people (relationships that started independent of the 'net). And yes a couple of the meetings were sexual. Last one of those was some time ago though.

I always go for the same strategy if it's online moving into real life - chat, email, possibly phone calls, swap pics or video (and I don't mean XXX rated), then pick a place to meet. Then see where it goes from there.