Here is the following scenario that I was wondering about. A Cunning Sneak has the power that if they move 3 or more squares in a round and they have partial Cover or Concealment they can make a Stealth check to hide. So if the character runs behind their allies they gain partial cover and can make a Stealth check. As you have pointed out they can’t remain hidden, but what if they then use the rogue At-will power Chameleon (level 6 Utility, PHB). The power lets you make a stealth check to remain hidden when you lose cover or concealment, and on success retain the benefits of being hidden until the end of your next turn.

In theory the Cunning Sneak can run behind an ally, become hidden, and retain that for their entire next turn.

Anyhow, thanks for your insight; your points are all valid and good.

Of course if he was behind more than one rank of allies and at more of an angle, or if he was in the right place behind a Large or larger creature, then it would be possible to get superior cover from allies. Since the relevant section of the Cover rules (Creatures and Cover) begins “When you make a ranged attack..” it’s possible to argue that those rules aren’t intended to grant cover for anything but ranged attacks. In fact, I suspect that’s why the 1st printing rules didn’t include the caveat in the errataed Stealth rules, but that’s a bit too nitpicky even for me. Still, the presence of that caveat (and exceptions to it) pretty clearly rules out stealth from allies even without resorting to the literal interpretation of “You gain stealth from total concealment but then immediately lose it for failing to remain hidden”.

In response to your rogue, though, in terms of RP justification: Yes, he is supposed to hide behind the big burly fighters. They grant him cover from ranged attacks and prevent the enemy from advancing on his poorly armored self without suffering attacks of opportunity. You are, in essence, hiding behind the fat kid during dodgeball. Yes, he shields you from attacks quite well, but you’re not going to fool the opposing team into thinking you’re not even there. Without some truly supernatural hiding ability (ie. feats or powers that grant an exception) there’s just too much moving around in combat, even when the participants are stationary, for you to remain well concealed enough to avoid notice. Absolute best case you might manage to stay unnoticed long enough to get in a sneak attack, but you’re not fooling anyone by ducking back behind him. Combat advantage from stealth relies on the enemy not knowing where you are, not just being unseen. And they know you’re hiding behind the fat kid.

That said, outside of combat I’m perfectly happy allowing stealthers to lose themselves in the crowd. Maybe even in a grand melee, with lots of additional combatants in the background. But even that would require enough maneuvering between attacks that the rogue would be better off flanking rather than making infrequent but damaging attacks. Which, I think, is how it should be. Rogues darting from the shadows to deliver a deadly surprise attack is awesome. Ducking back into the shadows and being immediately forgotten so they can do it next turn and the turn after that ad nauseum is just silly.