We import large Lead lists for shows we attend. We want them in the system to send them our email marketing pieces, track which campaigns/shows they were a part of, and promote them to Qualified Leads when appropriate. However, we don't want to see all of these (thousands) of leads each time we go to our listing, so we mark them as hidden and only pull them up when needed.
We have inactive Customers that we don't need to interact with regularly (but we certainly don't want to lose their history), so we mark them as hidden from the list.
Other areas the Hide option effects:
Users can choose to include or not include hidden companies/contacts in their search results by checking/unchecking the "Include Hidden" box.
Companies that are of type Customer that are hidden, are also hidden in the Customer Listing. To show the Customer in the Customer Listing, select the "Show Hidden" option in the "Customers" menu.
Many of the Sales and Commissions reports can be run with or without the hidden customers. This allows for a more concise report that only contains active customers in it.
Bulk Update Hidden
Companies and Contacts can be multi-selected in the Company/Contact Listings and assigned or unassigned the Hide option all at once. Multi-select your contacts, then right-click on a selected on and choose "Bulk" -> "Update Hidden".