It looks like you're trying to slideDown against the whole parent element, when you really only want to slideDown on the one you're adding. Something like this might seems to work:
$("#add").click(function() {
elem = $('<div id="div" class="dyn">I\'m no more hidden!</div>').hide();
$(".container").append(elem);
elem.slideDown();
});
$("#hide").click(function() {
$(".container").slideUp();
});
Check out an example here: http://jsfiddle.net/RP3Zy/2/