I don't think a hidden link will help you much. I doubt it will hurt your site, but any SE spiders that see it on his site will not like that his site is trying to trick them. It would serve both of you better if he would not hide the link. Google's guidelines specifically warn against hiding links or text.
*edit* Also, if the link is hidden, no visitors to his site will see the link and click through to yours. So even from a traffic standpoint, hidden links are not a good strategy.
However, the best kind of links are from sites with a similar topic to yours. It's like the old saying about comparing apples to oranges. If your sites are both in the same general vein, a (non-hidden) link from his site will be helpful. But if your site is about apples and his is about spaceships, it probably will not be as helpful as far as pagerank and search engine ranking.