If it is hidden the field does not exist so Jaws cannot read it.
I agree that should be the case. However, when I open the form in Reader the fields do not appear, then when I run the form through accessibility testing using Acrobat Pro 8.1 and JAWS it reads the fields aloud. It does not recognize it when you tab through the form. I am not sure if this is even an issue with 508, I just want to make sure that I test correctly.