You will need to install the Psychonauts Hud Toggle mod to turn the hud On/Off.
Download link - Psychonauts-HudToggle.zip:
Unpack the Psychonauts-HudToggle.zip file into your installation directory (where your game executable file is).
Run your game as usual. While in game, press the 'Q' key twice to turn the hud off. You can now toggle the hud on / off by pressing the 'Q' key again.
When the hud is turned off, all text and the menu will also be turned off. If you need to read anything or navigate the menus, turn the hud back on.