In a ArcGISDynamicMapServiceLayer layer there is way to hide labels but it doesn't seem to be working correctly.  I set the LayerDrawingOptions.ShowLabels to false and it still shows the labels on the map.  
Code:
ArcGISDynamicMapServiceLayer layer = Map.layers[0];
DynamicLayerInfoCollection layerInfos = layer.CreateDynamicInfosFromlayerInfos();
layer.DrawingOptions = new LayerDrawingOptionsCollections();  //why is this null to start with?
foreach(DynamicLayerInfo layerInfo in layerInfos)
{
     LayerDrawingOptions options = new LayerDrawingOptions();
     option.LayerID = layerInfo.ID;
     option.ShowLabels = false;
     layer.LayerDrawingOptions.add(option);
}