For the three-hundred, seventy-fourth time: YES!
Hide in Plain Sight is nothing more than a modification of when someone can use the Hide skill.
Succinctly, the Hide skill requires that someone:
1) Not be under direct observation;
2) Have cover or concealment
Thusly, someone hiding 20' down a dark alley, but otherwise in plain view, can hide because he has concealment (20% due to darkness). However, he is automatically revealed to any elf or dwarf who should walk by. The elf can see him because he can see twice as far as a human (who has bright illumination up to 10' down the alley), and the dwarf can see him because the dwarf can see through 60' of darkness.
So, in what fashion does HiPS change the Hide skill?
SRD said:
Hide in Plain Sight (Su): A shadowdancer can use the Hide skill even while being observed. As long as she is within 10 feet of some sort of shadow, a shadowdancer can hide herself from view in the open without anything to actually hide behind. She cannot, however, hide in her own shadow.
It quite obviously removes condition #1.
It does not quite obviously remove condition #2. Rather, it states that, if you're in the open, you can hide without something to hide behind - which is generally the role of cover.
Given that, I see no reason to believe that the HiPS rules trump the other rules of perception. Chiefly, I see no reason to believe that it trumps the "Darkvision and low-light vision can possibly see you anyway because to them there are no shadows" rule.