Back about 10 years ago, it was so common to see websites that would have 10,000 keywords in hidden white text in the footer the homepage in order to hope to rank for every one of those hidden keywords.
Obviously, Google considered this pretty spammy and their search algorithm started dealing with this years ago. Now it's pretty rare to see websites with full-on hidden text that are actually ranking well.
Yes, hidden text can definitely be used for the good of the user experience on a website, but is still definitely can be used for nefarious purposes. Google's new Webmaster Help Video brings up the issue of hidden text that becomes visible with the user action, and how that affects a website's ranking.
"It's pretty common on the web for people to want to be able to say, click here and show manufacture details, show specifications, show reviews, and that's a pretty normal idiom at this point," said Google's Matt Cutts in the video. "It's not deceptive, no one is trying to be manipulative, it's easy to see that this text is intended for users. And so as long as you're doing that, I wouldn't be too stressed out."
However, he brought up the potential spamminess that some webmasters inevitably try to get away with.
"Now certainly if you're using a tiny little button that users can't see, and there's like six pages of text buried in there and it's not intended for users, and is keyword stuffing, then it is something that we could possibly consider hidden text or probably would consider hidden text," Cutts said. "But in general, if you just have something with a nice AJAX-y sort of site and things get revealed, and you're trying to keep things clean, that's not the sort of thing that's going to be on the top of our list to worry about. It's pretty common on the web, a lot of people expect that."
He brought up the example of Wikipedia on a mobile phone, where you click to reveal each section, as an example that is within Google's guidelines regarding hidden text. So if you have worried that potentially a reason that affects your Google rankings, as long as you're not doing it for bots instead of for users, you have nothing to worry about.