I wrote that small tips (after reading a question in another thread here) so maybe I can help. ;-)
To be able to see throught the text, you absolutely need some opacity in steps 2. If you want a completely transparent effect, set your type to white with an opacity of 0%
Than the last steps to enable "KnockOut Group", must be set when the text area object is selected with the Selection tool. In the top entry of the Appearance panel you should have "Type".
Try it, and if this is not working for me let me know.