Introducing umlauts

When reading an article about Google Earth in Technology Review last month, I came across a new word: co-ordinates.

Obviously being a geographer, that word is not actually a new one to me, but rather a presentation of it that I don't recall ever seeing before. The word is often written as co-ordinates or coordinates, but this time it was written with an umlaut (if that's the English word for two dots hovering over a letter): coördinates. Umlauts are something I see regularly with living in Germany, but not something I would expect to see decorating English words on which I've not previously seen an umlaut sitting.

At the time of reading the article, it puzzled me for a little while, but a transatlantic plane ride quickly helped the puzzling disappear from my mind. On my way back from CeBIT this evening, a friend passed me The New Yorker to help keep me entertained on the journey. To my surprise, once again, I came across this apparent trend in a short column about drinking Tab cola. This time it was with re-engineering (or reengineering), becoming reëngineering.

Has the adding of umlauts to English words been introduced as the new American English way to emphasise the pronunciation of words in which two letters sit together but don't work in the standard way? Is it becoming the replacement for the hyphen in British English, which in the past seems to have largely been omitted from words used commonly in the American lexicon?