Hidden keyword are illegal and you can get you site banned from google. You can see that the other posts in this thread confirm this.
I think that is a huge risk to take.

Yes there are ways to hide your text effectively but if someone sees it like your competition and reports it you are going to lose.

So better avoid it period!

As for the issue that inertia has brought up. The only solutions to losing out to competitors using hidden text is to become "rat". Yes we have to snitch on them.
When you do an analysis on the competition of your client then you should always search for hidden text on their site and if you find it report to all search engines.

If your client wants you to use hidden text and you refuse and he goes to another SEO and raises his ranking in this method then I would say that there is nothing wrong in reporting the site to search engines.

This is the only way the "nice guys" of SEO can win

You come across a site when you are just browsing or doing some research no matter if it is not related to your competition. Sometimes you see some site and you are suprised how it is doing well, just jump in and take a look at the code and if you find hidden text report it.