An example of this practice is to display an FTP password in hidden text to reduce the number of users who are able to access downloads and thereby save bandwidth.
Parody sites (such as Uncyclopedia) occasionally use the technique as a joke about censorship, with the "censored" text displayed black-on-black in an obvious manner akin to a theatrical stage whisper.
It is also used by websites as a spamdexing technique to fill a page with keywords that a search engine will recognize but are not visible to a visitor.
However, Google has taken steps to prevent this by parsing the color of text as it indexes it and checking to see if it is transparent, and may penalize pages and give them lower rankings.
A link using rel="nofollow" (to hide it from legitimate search engine spiders) and hidden text (to remove it for human visitors) would remain visible to malicious 'bots.