The plugin, "VanishNoPacket", is a very common plugin on huge survival servers. It allows admins to vanish in an "unhackable" way because it stops the server from broadcasting update packets to users. I know that with the current API it is not possible to do so, so what I'm suggesting is exporting something like packet broadcasting to the API.
Reference:
http://dev.bukkit.org/bukkit-plugins/vanish/
Did you even read the topic?

That was blazingly fast. VanishNoPacket stops the broadcasting of position updates to all players. I don't think your plugin does this.
I'm just really active on the forum

Also, yes it does ^^
But how? If so you definitely should put this up on GH and into the plugin repo. Maby call it "VanishNoPacket"

There is a function (SetVisible and IsVisible) added really early on by FakeTruth that hides players. He used it to remove the bodies of player's after they die (this sounds dark). If it's false the server won't broadcast it's packets to the other players. Unless of course people forgot about it and removed the IsVisible check before sending packets, but I doubt it.
Looks like there is no check around the
movement update line, but the
SetVisible function itself "destroys" the player object for all other players. Of course it's still there though
It's possible that I'm not allowed to change the name to VanishNoPacket due to copyright and stuff.
The original plugin is licensed under Apache 2.0