Whoever told you this may have been trying to say, or I hope atleast, that putting additional content to bolster your search rank then put a display:none on it, is considered "black hat."
I.e… I want people to check out a site on.. black hats. I put a bunch of keywords like this at the very top of the page…
best black hats of best quality made in usa made of fine italian leather imported here by black hat and hats company of italy with finest leather in gift hat, black hats for friends and for your brother, mother, sister, great gift idea black hat
Take that example, and now make it 10x longer.
Now, its a h1 tag, so thats supposed to be optimized, but, its jumbled words, that would look quite stupid on a website.(Even though that doesn’t stop most people it seems) So, to have my site still look nice, I wrap the display: none around it so its not shown, but in the source(how a search engine reads the site) it will look like the best damn website for a black hat that is a gift for a family member made out of the best materials. :P
Display: none content that is actually able to be seen via ajax or simple :hover, and doesn’t appear 50x on the same page, is fine. But hey, I’m no SEO expert! ;P