if ( $$parms{submit} ) {
    my $newtest = decode( 'utf8', $$parms{testtext} );
    my $newhid = decode( 'utf8', $$parms{testtext_hid} );
    print "<p/> The testtext parameter as received was: ". $newtest,
    "<p/> The hidden parameter has been decoded as: ". $newhid, 
    $cgi->hidden( "testtext_hid", $$parms{testtext_hid} );
        # note: changed text content slightly, and used "raw" hidden value (not "decoded" value)
}