Even when autohide is enabled, a small sliver of pixels from the bottom panel appears at the bottom of the screen where the bottom panel is.  I've read that by enabling compositing and setting alpha=0, the panel can be completely hidden. 

Unfortunately, it does not always stay hidden.  Here's a way I've been able to reliably reproduce the problem on my machine from a new installation/update of Fedora 15 and Xfce as of June 21, 2011:

1. Select auto-hide for the bottom panel and enable compositing
2. Select bottom panel preferences, and chose an alpha value of 0, rendering the panel transparent.  WORKS: panel is transparent, and completely hidden when not hovered over
3. Delete a couple launchers and the separators, log out, then log back in
4. The bottom panel now shows the small sliver of background color and is not transparent any more.  In order to fix this, compositing can be turned off, then turned back on again.