When a word is too long to fit on the current line of text, it can either be moved to the beginning of the next line (wrapped), or it can be broken into two parts: one finishing the upper line, and the other starting the next line (hyphenated).
The hyphenation options are for the truly geeky, my-typography-is-my-life types. The defaults are excellent and can suffice for all but the most precise layouts (which you should be doing in InDesign or perhaps Illustrator, anyway).
If you want to fine-tune how hyphenation is applied (or have far too much time on your hands), select Hyphenate from the Paragraph palette menu to open the options shown in Figure 13-19. The Hyphenation check box (upper left) activates/deactivates hyphenation. The top three fields govern which words to hyphenate and what limits to place on the hyphenation. (Think of the second and third fields as Hyphenate or cram into the line without hyphenating.) The lower two fields control the appearance of the opposite margin, limiting the number of consecutive lines that can be hyphenated and the maximum distance from that margin that a hyphen can be placed.
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