My experience with longer than 328 feet for ethernet has offered mixed results. I have some installed runs in excess of 380 feet, and they work. They worked at 10 mbs, they work at 100 mbs. However, I have not thrown a network analyzer on there to see if they actually have really good throughput or if there are multiple retries. Your individual mileage may vary.
There are other options, but first let me say I would use wireless i think ( and i pull wire for a living ). Easy to set up, make each neighbor buy thier own station adapter, easy to deploy, easy to dismantle, no physical cabling worries (no physical evidence).
Now, if you are just determined to dig in the dirt, you might consider thinnet RG58 coax as it can run 185 meters at 10BT. That would fix your distance limitations, and it is designed to be a series connection between all the computers, so from one house to the next would work.
As is the case with any copper media, the possibility of different ground potentials between connections exists. With the coax 10BT it could be very noticable, as the shield is grounded at each NIC/device. I have experienced problems with that before. With Cat5, I believe the pairs are balanced (unlike the coax unbalanced scheme) and not referenced to ground, so I think the chances of a grounding problem would be less.
With Cat5, a mini hub could be used to extend the length, and provide a 'tap' if you will at each house. Keep in mind there are rules for the number of hubs you can cascade, too many hops makes too much latency and ends up with collisions.
Good Luck! It is only my opinion, based on my experience and education...I am always willing to learn, educate me!
Daron J. Wilson, RCDD
daron.wilson@lhmorris.com