It creates a hidden input on the form for the field (from your model) that you pass it.
It is useful for fields in your Model/ViewModel that you need to persist on the page and have passed back when another call is made but shouldn't be seen by the user.
Consider the following ViewModel class:
public class ViewModel
{
public string Value { get; set; }
public int Id { get; set; }
}
Now you want the edit page to store the ID but have it not be seen:
<% using(Html.BeginForm() { %>
<%= Html.HiddenFor(model.Id) %><br />
<%= Html.TextBoxFor(model.Value) %>
<% } %>
This results in the equivalent of the following HTML:
<form name="form1">
<input type="hidden" name="Id">2</input>
<input type="text" name="Value" value="Some Text" />
</form>