I haven't specifically tried it, but I don't see that there would be a problem with a symlink as long as the directory you point to has the appropriate permissions.
Apache has a feature to look in a user's directory for html files. Perhaps not exactly what you're hoping for (url-wise), but here's what this is how it works. You modify your httpd.conf file to give one or more users permission to use this feature, specify what the directory name would be, restart apache, and you can access the page via "http://your-domain-here/~username". You must make sure the web server has access to the directory and the files. If not, you'll get a permission denied error page when accessing the file.
To set this up, open up your httpd.conf file and look for "UserDir". Mine is set up something like this:
UserDir enabled user1 user2 ...
As far as I understand, that configuration prevents the web server from implementing user access except for those users explicitly mentioned on the "enabled" line. You'd also need a public accessible directory named public_html in the user's home directory to hold the html code. And directories
leading to that dir must have at least
execute permissions to allow the web server to access files (not necessarily read access... just execute). The files
need to have read access.