Cursorcerer is a little tool I hacked together which allows you to hide the cursor at any time by use of a global hotkey. It can also autohide an idle cursor and bring it back as soon as you move the mouse.
The inspiration for this tool is one of my favorite and most utilized OS X features: the control-scrollwheel zoom trick. I use it all the time to make things like embedded flash videos full screen. The trick’s only major downfall is that it’s a constant battle to get the cursor out of the way.
To install, just double click on the prefpane. Hit control-option-k to zap and unzap the cursor. If you want to uninstall, go to ~/Library/PreferencePanes/ and trash Cursorcerer.
Update: Cursorcerer has been updated to a 64-bit version that runs properly in Yosemite and above. The minimum idle hiding threshold has also been lowered at the request of some users. Legacy users can grab the 32-bit version here.
Download Cursorcerer 2.0