Using Invisible text is the practice of making the color of the text on the page the same as the background color. As an example... white letters on a white background qualify as 'invisible' text. The reason that many search engines have banned this kind of text is because it is VERY hard to detect it. This is usually a result of the vast number of color combinations that have to be recognized when an engine 'spiders' the page.

Example:
You create a web page that uses a background color of #FFFFFF (white). You then place text on the page and slightly alter the color to make the color of the text #FFFFF0 (off-white), which would now be ALMOST totally invisible.

Many (but apparently not all) of the major search engines now have a policy against this type of technique, and have set up their indexing programs to check for it. When spotted, the Penalty can range anywhere from ignoring the text, to refusing to Index the page at all, or even worse. This type of practice is now regarded as Spam by most of the search engines and we highly recommend avoiding it.
Of course, you may come across a well ranked page here and there that is still using Hidden Text. This should be taken more as an indication that the page has not been re-indexed since the tactic was made 'illegal' than an indication that the search engine allows this practice.