I send hugs to my sweeties all the time, in text, SMS, and IM. And they get them, on some level. I think it's a matter of training; after a time of reacting to a textual "*hug*!" as a good thing, I am primed to feel it that way.

It's no replacement for a real hug, but then, an internet fist is not quite like actually getting punched in the chops, either.