Yes, I've done this. Yes, they need to be chilled and insulated. My lines are chilled via air being sucked from the bottom of the freezer, through the 4" insulated PVC through the tap box, and back into the freezer.
I would recommend against doing the project unless you have a large amount of experience in draft line balancing or know a draft technician. Case in point: I don't have that experience. Now that I've built it, I need to have a gas blender installed to keep the thing from pouring foam. Or I can go back to vinyl lines, which I won't do.
...ah, the life of a persnickety homebrewer.