My husband and I met when we were 18. I was casually seeing his best friend at the time and my hubby had a girlfriend that he had been dating for a year at that point. We talked a little, clicked, and became good friends.
For 6 years, we partied, talked, moved away, reconnected, and had our occasional hook ups and partners. By the beginning of the sixth year of knowing each other, he was single and I was in a miserable relationship that I was dying to get out of and did. He was hinting that he liked me and I couldn't be bothered, but I had always had a huge crush on him and just wanted to make out with him to see what it would be like and do NOTHING more.
Well, I broke up with my ex, moved back home, and less than a day later, we kissed. I thought he was going to just be hook up and nothing else, but he turned out to be the best thing that ever happened to me. Six years of being under my nose, there all along, and POOF! just like that, relationship! We've been together now for almost 5 years, married for almost 2.
My mom always said to marry your best friend, and I did :)
Edit: And to answer your last question, the hardest part of dating your friend is seeing if you're even sexually compatible or even turned on by them, because you NEVER think of them that way. My hubby and I had the attraction from the get go, but simply never acted on it. The hardest thing is pushing past that barrier to see if you even have that lusty passion for them, because you have all the rest of the qualities to make a relationship function already, EXCEPT that one.