Matt Cutts Webmaster Video On “Underscore v/s Dashes In Urls”

Matt Cutts in this video explains how Google interprets the underscores and dashes in the URLs.

I was under the impression that there is not such thing like an underscore in the English language and the dash being a hyphen would separate the words and take each word separately , but there is more to it.

Dashes are preferred over an underscore in the URL as a dash does separate out each term and each term gets indexed separately but an underscore joins the terms and indexes it as one term.

If you already have a site which has used an underscore in URLs you need not bother to change all the URLs as it is not very much a ranking factor. But incase you are developing a new site then opting for dashes in the URL is the correct option.