I've found that the empty text doesn't appear in (6.x-3.0+76-dev from 9/22/2012)
It seems that there is a flag $this->options['empty'] that is used to control whether an area should appear if the results are empty. (An area is either a header,footer or empty text). However, there is no way to control the settings of this field from the configuration of the empty text, and it should default to whatever value it should be to always show the empty text if the rows are empty, unlike the header or footer text. I see this line in views_handler_area_text.inc around line 92 :
if (!$empty || !empty($this->options['empty']) ) {    

and I'm wondering if it instead should be just :

  if (!$empty || !$this->options['empty']  ) {

I'm also not sure where to set the options for ['empty'] exactly. Also, IMHO, it would make sense to rename 'empty' to be 'show_if_empty' instead of just 'empty' for $options.

Comments

Same problem (6.x-3.0 or 6.x-3.x-dev). Used your suggestion on both versions and it fixed the problem for me. Does it break something else in the process? Really don't know. Thanks!

Definitely the same issue (different releases). I reversed the commit referenced in comment 14 of #1677784: $empty argument of the area handler render() is FALSE for the empty area. to fix this for me in 6.x-3.x.