is this not being done already somewhere?

Not that I know of. I know of separate web sites, services and applications that could accomplish what my idea does. Such as Conference/Chat Applications, like Skype, Screen sharing web services like Yugma, Customer Review sites, Sites like BillMonk and Obopay.
None that I now offer Group Live online shopping and web surfing.

This sounds a bit like me.dium:
http://me.dium.com/

Probably most do-able as a plug in for browsers. Kind of hard to imagine what the experience would be like. But it would be interesting to see. The most restrictive aspect would be managing limited screen space.

I'm imagining a way for myself and my friends at different computers to visit the same websites and have the same display on each screen, with some kind of instant message/chat so that we can discuss what we're looking at - am I close?

You'll have to decide whether we all have control of the browser or whether as the person who initiated the session I'd have the master window and the others would simply repeat what I see. The two are quite different, but I can see possibilities for either. Perhaps it's something the initiator of the session can decide.

I would find this a little annoying because who would get to control the scroll bar and mouse? I might not want to watch the dancing kitty video on you tube... Part of the lure of surfing the web is that it is an active activity as opposed to a passive activity like TV. So for the folks not controlling the mouse, it becomes a passive activity.

It would be good say if it was meant to be instructive... such as how to use a site etc. Still undecided on what I should rate it...

A service called Itzle executes your idea almost exactly as you describe it: http://www.itzle.com/

Rather than investing so much in developing your idea from scratch, consider contacting Itzle to suggest implementing some of your more original components. Such as:
* A friends-only version that removes strangers from the browsing experience.
* A way to plan and organize times, dates and users for sessions, and issue invitations.

Besides Itzle, there is a new trend called "social browsing" (Google it). At the helm is a browser called "Flock." With the appropriate extensions (as Anathema mentioned, me.dium is one of them), Flock can be used for group browsing, sharing websites, chatting and so forth. Check it out: http://www.flock.com/

Additionally, a number of services let you chat with other visitors on a site at the same time as you.
1. Gabbly: http://www.gabbly.com/ -
2. Yaplet: http://www.yaplet.com/
3. Zpeech: http://www.zpeech.com
4. Chatsum: http://www.chatsum.com/

Lastly, there's Hive7: A tool geared to teens that lets them create their own "rooms" in which to chat. It can also be used for collaborative group browsing: http://vww.hive7.com/

All in all, it seems your idea required a little more research before posting.

Ah! Thanks guys. :P I feel so foolish now
I think the one that sounds most like my idea is me.dium.com and perhaps chatsum.com looks cool also.
To PhilipH and ccozad, I didn't envision screensharing to be major part of the functionality, in fact the way me.dium has done is perfectly fine in my opinion.
Thanks for for sharing your comments fruitvale and anathema, they've been a great help.

sounds like its been done done done! but who says u cant man!

BEEN DONE!!!!!!!!!!!!!

Like the concept, especially when working with my 78 year old dad - trying to explain over iChat how to sign up for something.