How they approach the interview process depends on whether you present yourself as being from out of town or not.
If you send your resume with a cover-letter explaining that you live elsewhere, but are moving there as soon as you get a job lined up then they will be far more likely to accommodate your requests.
- How can I find out if the employer is really considering hiring me?
Unfortunately there is no way to know that. Speak to them and judge it as best you can. Remember not to consider any deal final until you've signed on the line which is dotted. (kudos to anyone who gets the reference)
- Is it OK to ask for any (travel) compensation?
You can certainly ask! Whether or not they'll help you out or not depends to be seen. The smaller the business, probably the smaller the odds that they can bear the brunt of your expenses. Keep in mind that they won't consider it unless they're very interested in you. Just be polite about it and see what happens.
- Is it OK to ask for a Skype interview instead - and should I? Would it spoil my chances?
Since the distance is significant they will most likely request to interview you either by phone or Skype before they request an in-person meeting. At that point you can ask about travel expenses. If they don't want to cover anything then you may wish to reconsider seeking employment with them - at that point does even a Skype interview make sense?
If they do, however, then try to schedule as many interviews as close together as possible, and maybe go down for a few at a time. A company may accept delaying your interview a few days if they're really interested in you, and if they know you're travelling quite a long way to get there.