S0508: Thalidomide and Temozolomide in Treating Patients With Stage IV Melanoma That Cannot Be Removed By Surgery

DISEASE CHARACTERISTICS: * Histologically confirmed malignant cutaneous melanoma * Unresectable, stage IV disease * Unknown primary allowed * Measurable or non-measurable disease * If all known sites of disease are within a previously irradiated port, disease progression must be clearly demonstrated * No brain metastases by CT scan or MRI within the past 42 days * Prior brain metastasis allowed provided both of the following criteria are met: * Completely resected and free of disease * Treated with whole brain radiotherapy and completed treatment at least 28 days ago PATIENT CHARACTERISTICS: Age * 18 and over Performance status * Zubrod 0-1 Life expectancy * Not specified Hematopoietic * Absolute neutrophil count ≥ 1,000/mm\^3 * Platelet count ≥ 100,000/mm\^3 * Hemoglobin ≥ 9 g/dL (transfusions allowed) Hepatic * Bilirubin ≤ 3 times upper limit of normal (ULN) * SGOT or SGPT ≤ 2.5 times ULN (5 times ULN if liver metastases are present) Renal * Creatinine ≤ 1.5 times ULN Other * Not pregnant or nursing * Negative pregnancy test * Fertile patients must use effective double-method contraception for 4 weeks before, during, and for 4 weeks after study participation * No other malignancy within the past 5 years except adequately treated basal cell or squamous cell skin cancer, carcinoma in situ of the cervix, or adequately treated stage I or II cancer in complete remission * No history of allergic reaction to dacarbazine PRIOR CONCURRENT THERAPY: Biologic therapy * No prior thalidomide for stage IV disease * At least 28 days since prior biological therapy * At least 28 days since prior immunotherapy * At least 28 days since prior adjuvant interferon alfa Chemotherapy * No prior temozolomide or dacarbazine for stage IV disease * At least 28 days since prior chemotherapy Endocrine therapy * At least 28 days since prior hormonal therapy Radiotherapy * See Disease Characteristics * At least 28 days since prior radiotherapy Surgery * See Disease Characteristics * At least 28 days since prior surgery for primary and stage IV disease Other * No more than 1 prior systemic therapy regimen for stage IV disease * At least 28 days since other prior systemic therapy