Tim Converse from Yahoo! explains;
Luminescent pearly white: This would be a case where the SEO designs a site to show up for relevant queries and not to show up for irrelevant queries. Do luminescent SEOs exist? Well, Jon Udell is one anyway.
What about simply a white SEO?
White: The SEO starts (if lucky) with a site full of content you can't find anywhere else, and that answers a need that searchers actually have. Then the SEO makes sure the site is crawlable, and that titles and internal links make sense and are descriptive. Then the SEO thinks hard about the queries that really should pull up this content, and tries to discover if the right terms are present. Then (the hard, artful part), he or she rewrites content with a dual consciousness of the infovorous human reader and the termnivorous spider, making sure that the most important terms and phrases for the spider are present (in all their forms) and forefronted for the spider, without degrading the quality for the reader.
He goes through 9 different shades between black and white to describe the colors of SEO; Dark inky black, Charcoal, Dark gray, Slate gray, Gray, Light gray, Off-white, White, and Luminescent pearly white.
But he has created definitions. This may be the first time any search company employee (obviously Tim is not representing everyone's thoughts at Yahoo or even Google), on defining the different types of SEOs.
That is the problem. One "white hat" may consider himself/herself to be a white hat but in reality, they may just be a form of gray.
Forum discussion at WebmasterWorld.