Very common. We have several groups in Norway, I would guess that several hundred people around the country are engaged in such activities. Doesn't sound like much? Remember that Norway has a population of about 4.6 million people. The name for it here is mostly "laiv" and not LARP.
I'm experienced at dinner table RPG (AD&D, D&D 3rd edition, Vampire, etc.) but even I think the people doing this are kinda strange. Well, at least they get some fresh air.