Have you got any markup we could look at to see how you're achieving this?I am using a background image, z-index seems to do the same thing (i.e. hides the text) for me apart from on IE6.
Conceptually, there's no difference - they're both hiding text using CSS. It's just that the first method moves text horizontally, while the second moves text behind.I'm just thinking along the lines of google possibly picking up on a -9999px indent, whereas z-index is fairly innocent?
So if Google frowns upon text-indent, then they're also going to frown upon z-index.
But they don't: http://mezzoblue.com/archives/2008/05/05/image_replac/.