When I login to my Windows 8 surface tablet using the software keyboard, the keyboard has a "hide keypress" button that seems to do nothing. What does this button do?
Hide keypress turns off the change of colour when you press a key. Normally, the key lights up (fades to a lighter colour before becoming dark again) on a keypress. When you 'hide' a keypress, you are hiding that effect. This is useful against anyone looking over your shoulder while typing your password, though there's an increased chance of misclick.
Also, apparently it can help reduce resource usage a little, depending on the capabilities and load of your device: http://compulsivetech.biz/lance/2012/06/windows-8-new-feature-hide-keypress-bad-or-good/