Standard HTML4 on this subject:
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In HTML, there are two types of hyphens: the plain hyphen and the soft hyphen. The plain hyphen should be interpreted by a user agent as just another character. The soft hyphen tells the user agent where a line break can occur. Those browsers that interpret soft hyphens must observe the following semantics. If a line is broken at a soft hyphen, a hyphen character must be displayed at the end of the first line. If a line is not broken at a soft hyphen, the user agent must not display a hyphen character. For operations such as searching and sorting, the soft hyphen should always be ignored.
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http://www.w3.org/TR/html401/struct/text.html#h-9.3.3
RFC 2070 - Internationalization of the Hypertext Markup Language on this matter:
http://www.faqs.org/rfcs/rfc2070.html
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NOTE - the soft hyphen character (U+00AD) needs special attention from user-agent implementers. It is present in many character sets (including the whole ISO 8859 series and, of course, ISO 10646), and can always be included by means of the reference *. Its semantics are different from the plain hyphen: it indicates a point in a word where a line break is allowed. If the line is indeed broken there, a hyphen must be displayed at the end of the first line. If not, the character is not displayed at all. In operations like searching and sorting, it must always be ignored.
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