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The other opportunity that a cloaked page affords is to introduce some elements of html like bold text, italics, underlined text, etc, that give a search engine some idea of what is important on the page. These may look ugly or inappropriate on the regular visitor page and would not be used.
As for the H1 vs. H4, there is some real and anecdotal evidence that H4 is just as good as H1 as long as no H1,H2,H3, tags appear on the page. In other words the algos appear to give weight to headings within the page rather than across sites. But since only search engines will see the ugly text generated by an H1 tag on a cloaked page, it seems using H1 for titles and maybe H2's for headings (and maybe an H3 around a keyword phrase ;) )will produce the desired result.
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To determine the format of a cloaked page that you are going to create, one of the best ways is to run a 'cracker' over the SERP's of the engine you are interested in ranking high on.
To do that, you put together a list of variables you are going to parse out of the analysis of the pages in the ranks that they have achieved on the engine you are targetting....then you find the similarities across the pages. Once you've got that down, you can spot 'trends and patterns' on the charts that you put together.
From reading some of your posts, you sound a fairly knowledgable programmer :) it should be pretty easy to figure it out from there. Try a site search on 'cracking search engine algo' or perhaps 'brett tabke's eggshell (or egg shell) that's a quote from a post I made in a thread discussing similar.