The line of sight mechanic in WoTR is probably one of the most simplest I know, but the way it's written lends itself to misinterpretation. Even the FAQ could have been clearer, the problem lies with GW using the term "units" instead of "formations"
Here's my interpretation :
Rear companies of a formation never have line of sight through the front rank of companies, whether they're shooting at units on a hill or from the top of a hill, hence they always provide supporting fire.
Where there are two separate formations on the same level of a hill, the rear formation would have no line of sight through the formation in front, nor can it be seen from the ground.
Where you have separate formations on different levels of a hill, the higher formation would have line of sight over the formation in front and would be visible from the ground, or indeed from behind a forest! (This I've never really understood but as I said, LoS in WoTR is meant to be straight forward, not literally of course!)
As Generalripphook mentioned, this definitely should be agreed upon before the game begins, as many types of hills poorly represent multiple levels due to their size and shape. The old Citadel hills for example are really only one level, so you would be either on or off the hill but never half hay up so to speak