It would be awesome if it did. I have never tried it
It works, but not always completely reliably, since some enemies might have enough skill in Spot/Listen to beat your Hide/Move Silently skills, and others might have True Seeing, which in NWN negates natural stealth as well as magical invisibility.
I tried it. My monk snuck up within attack distance of a wolf, but fire beetles spotted me instantly.
Like everything else in the game, it’s numbers. Your hide/move silently skill level needs to be greater than their spot/listen/search skill level. You also have to enter stealth outside their range of vision. This aside of the mentioned True Seeing ability, which lets a creature spot anything stealthy.
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