In our industry, there is a competitor who is now ranking #1 on many core keywords and they are using hidden text at the foot of their page. Same colour text as the background and it only appears when you mouse over. Its incredibly small - but from all I know this is a very old black hat SEO technique.
I have submitted a webspam report via google, but its been months and nothing. Any other suggestions/ ideas on how to combat this?
Why do you assume that the hidden text is giving them better rankings than you? perhaps they are better at running their own website and dont spend all their time worrying about what their competitiors are doing?
Do you expect google to take their rankings and give them to you because you are the best squealer in the class?
Tarquin, it's a huge Google problem at the moment and is definitely getting worse since they seemingly either do not want to do anything about it or are totally oblivious to it.
I know of a site in my niche that has about 100 pages of about 500 words per page and more than half the words on each page are the two/three keywords repeated over and over again.
Google doesn't care, I've reported it and many others time and time again and they're all still there happily ranking away ... And G has the audacity to wonder why legit webmasters are so totally hacked off with them!
Unfortunately you're going to have to live with it because they ain't gonna do a thing about it.