In HTML 4, there is a soft hyphen - What this is supposed to be is a hint that a hyphen would be OK here if required at the end of a line, but it should otherwise not be displayed.
I have no idea whether this is in the version of XHTML specified for EPUB 2, or whether any particular device would use it.
It would also be a major problem putting soft hyphens in anywhere they might be needed. They would need to go in every word that is in a paragraph that is longer than can be displayed on one line.
But you could test it for your device and if they work, put them in where ever you have particularly long words. I tried testing on my Android tablet using Mantano, but usually it does a reasonable job of hyphenation, so I would have to test for words it didn't do well before I could try them.