RFC 1738: Uniform Resource Locators (URL) specification 
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The specification for URLs (RFC 1738, Dec. '94) poses a problem, in that it limits the use of allowed characters in URLs to only a limited subset of the US-ASCII character set: 
"...Only alphanumerics [0-9a-zA-Z], the special characters "$-_.+!*'()," [not including the quotes - ed], and reserved characters used for their reserved purposes may be used unencoded within a URL."
HTML, on the other hand, allows the entire range of the ISO-8859-1 (ISO-Latin) character set to be used in documents - and HTML4 expands the allowable range to include all of the Unicode character set as well. In the case of non-ISO-8859-1 characters (characters above FF hex/255 decimal in the Unicode set), they just can not be used in URLs, because there is no safe way to specify character set information in the URL content yet [RFC2396.] 
 
URLs should be encoded everywhere in an HTML document that a URL is referenced to import an object (A, APPLET, AREA, BASE, BGSOUND, BODY, EMBED, FORM, FRAME, IFRAME, ILAYER, IMG, ISINDEX, INPUT, LAYER, LINK, OBJECT, SCRIPT, SOUND, TABLE, TD, TH, and TR elements.) 
 
What characters need to be encoded and why? 
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ASCII Control characters 
     Why: These characters are not printable. 
Characters: Includes the ISO-8859-1 (ISO-Latin) character ranges 00-1F hex (0-31 decimal) and 7F (127 decimal.) 
Non-ASCII characters 
     Why: These are by definition not legal in URLs since they are not in the ASCII set. 
Characters: Includes the entire "top half" of the ISO-Latin set 80-FF hex (128-255 decimal.) 
"Reserved characters" 
     Why: URLs use some characters for special use in defining their syntax. When these characters are not used in their special role inside a URL, they need to be encoded. 
Characters: Character Code
Points
(Hex) Code
Points
(Dec) 
 Dollar ("$&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" />
 Ampersand ("&&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" />
 Plus ("+&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" />
 Comma (",&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" />
 Forward slash/Virgule ("/&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" />
 Colon (":&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" />
 Semi-colon (";&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" />
 Equals ("=&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" />
 Question mark ("?&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" />
 'At' symbol ("@&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" />
 24
26
2B
2C
2F
3A
3B
3D
3F
40 36
38
43
44
47
58
59
61
63
64 
 
"Unsafe characters" 
     Why: Some characters present the possibility of being misunderstood within URLs for various reasons. These characters should also always be encoded. 
Characters: Character Code
Points
(Hex) Code
Points
(Dec) Why encode? 
Space 20 32 Significant sequences of spaces may be lost in some uses (especially multiple spaces) 
Quotation marks
'Less Than' symbol ("<&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" />
'Greater Than' symbol (">&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" /> 22
3C
3E 34
60
62 These characters are often used to delimit URLs in plain text. 
'Pound' character ("#&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" /> 23 35 This is used in URLs to indicate where a fragment identifier (bookmarks/anchors in HTML) begins. 
Percent character ("%&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" /> 25 37 This is used to URL encode/escape other characters, so it should itself also be encoded. 
Misc. characters:
   Left Curly Brace ("{&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" />
   Right Curly Brace ("}&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" />
   Vertical Bar/Pipe ("|&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" />
   Backslash ("\&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" />
   Caret ("^&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" />
   Tilde ("~&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" />
   Left Square Bracket ("[&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" />
   Right Square Bracket ("]&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" />
   Grave Accent ("`&quot<img src="typo3conf/ext/mm_forum//res/smilies/icon_wink.gif" alt="icon_wink.gif" /> 
7B
7D
7C
5C
5E
7E
5B
5D
60 
123
125
124
92
94
126
91
93
96 Some systems can possibly modify these characters. 
 
 
 
How are characters URL encoded? 
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URL encoding of a character consists of a "%" symbol, followed by the two-digit hexadecimal representation (case-insensitive) of the ISO-Latin code point for the character. 
Example 
Space = decimal code point 32 in the ISO-Latin set. 
32 decimal = 20 in hexadecimal 
The URL encoded representation will be "%20"