In early black and white western movies (prior to movies made in color) the good guys, or heroes, wore white hats while the villains, or bad guys, wore black hats. The Lone Ranger wore a white hat and even rode a white stallion! So he was a good guy even though he wore a mask. On the other hand, his faithful companion Tonto wore a feather! Perhaps he was a gray hat, or green hat? Or maybe he was a no-hat!
White hat search engine optimization is a means to enhance a Web site’s results on a search engine results page (SERP) while playing by Web marketing rules. In this day and age the goal is to become #1 on page #1 in the free (organic or natural) results section. The theory is the higher your placement along with the frequency of placement on page #1in related searches results, the more clicks or visits to your site. More qualified visitors should result in more conversions or sales.
Google is currently the leader in numbers of Web searches so we SEOs listen closely to what they offer as free advice. White hat search engine optimization, by their definition, creates relevant content easily accessible to the Web searching robots. Google cautions Web masters who care to read and listen, they should write content for their readers, not the search engine robots. They emphasize a clear hierarchy or design structure as well as (anchor) text links for navigation, proper use of titles, etc.
Black hat tactics involve deceptive frowned upon practices. Google warns they will react negatively to improper, or black hat tactics they outline, as well as other misleading practices not described (gray hat?). They may reduce ranking or even eliminate listings completely from search engine results. These penalties are either automatically done through their algorithms or manually through a site review. Google even encourages people to submit sites they suspect are engaging in black hat tactics.
Popular black hat tactics include spamming, use of link farms, article spinning and stuffing keywords into content. Google also specifically cautions against such things as hidden text, hidden links and use of irrelevant keywords. Cloaking is another black hat tactic; it displays different content to visitors as versus search engines.
White hat SEOs tend to play by the rules and thus produce longer lasting results. Black, or even gray, hats anticipate that their sites will eventually be caught and banned once the search engines discover what they are doing. They are in the game for the short term results. I advise you to study Google Webmaster guidelines and decide for yourself while weighing the risks and rewards.
Read more about the art and science of search engine optimization.