Back in the ancient days of Blender 2.4x, sculpt had a feature called partial visibility. You could hide areas of the mesh via border selection. This feature went away during the 2.5 rewrite, which was probably a good thing. The old code was nasty, touching too many parts of the code and resulting in a lot of file corruption bugs. My bad.
I rewrote the partial visibility tool during the 2010 Google Summer of Code as a much “safer” tool that mainly affects the PBVH (the acceleration structure used by sculpt mode for drawing and querying the mesh.) This code never quite made it to Blender trunk, but I’ve been working on a freshening that code up and getting it ready for a proper release as one part of the work I’m being sponsored to do by the Blender development fund.
The code has been cleaned up in various ways, and from the user perspective you’ll notice that multires hiding now works as you’d expect, rather than the very “blocky” look it had in the GSoC branch.
With BMesh coming soon to trunk (possibly as soon as 2.63) I’ve rebased my patches against that. Here’s a single diff containing the entire changeset: partial-visibility-20120210-00.diff (again, this is against the bmesh branch, not trunk!)
There’s also some in-progress documentation for partial visibility on the Blender wiki.