There's no clear right or wrong response on this from either Google, Yahoo! or Bing but, as Mike rightly put, this has been common practice by developers for a long time as a way of adding logos or custom headings where fonts have treatment not possible with CSS (think text style crisp in PhotoShop or with fonts that aren't licenced for @font-face
use).
As long as it isn't heavily used across your site (stick to logos and headings not body copy) and the hidden text doesn't have excessive keywords you're likely to be ok. Take a look at google.co.uk and you'll see they hide the h1 on there with visibility: hidden;
An important thing to consider is accessibility. Accessible sites are more SEO friendly because the content is available to everyone. Would your site still be usable if someone had CSS turn on but images turned off? It's not an uncommon thing and, with mobile use increasing, people may do this to keep data costs down.